Asda shuns supermarket promo code

Eight supermarkets, including Tesco and Sainsbury’s have signed up to a voluntary supermarket code to address the consumer watchdog’s concerns over “misleading” price promotions and ensure promotions are “fair and meaningful”, but Asda has yet to join.

Supermarket
Eight major supermarkets sign up to OFT promo code.

Aldi, Co-Op, Morrisons and Waitrose also signed up to incorporate a set of principles laid out by the Office of Fair Trading (OFT) into their own policies.

Asda, the UK’s second largest supermarket, has yet to sign up, but it is likely the supermarket is reluctant because its position on every day low pricing means it claims it doesn’t follow the same ‘high-low’ pricing model its rivals do, which would make the code less relevant. An Asda spokesperson says it has not signed up because it believes that one of the OFT’s guidelines will actually encourage more ‘high-low’ pricing, not reduce it.

“At Asda we are committed to giving our customers clear and accurate pricing information that fully complies with the law. As an everyday low price retailer, we will always focus on offering our customers the lowest prices week in, week out.

“We were part of the discussions around the principles and are very much engaged with the OFT’s work in this area, but whilst we are in favour of three of the approaches, there is one, regarding 1 to 1 promotions that we’d like a bit of time to consider. We’re not sure that best helps customers in these challenging times so we are taking the time to consider its proposals in detail.”

Discounters Aldi and Lidl are also less likely to be impacted by the guidelines than the major supermarkets.

The OFT’s guidelines aim to give consumers more confidence in the promotions offered by supermarkets and bring clarity to deals. It is hoped that clearer guidelines will mean that promotions are fairer and make it easier for consumers to understand their value.

Supermarkets are advised that prices should not be artificially inflated ahead of promotions to make discounts seem more attractive. Promotional prices should also only be live for the same or less time than original prices, so supermarkets would not be able to offer a half price deal for six weeks if the original higher price had only be in effect for two weeks.

Value claims printed on pack, such as ‘bigger price, better value’, must be true and there should not be a cheaper way to buy the same quantity of product.

Supermarkets are not accused of breaking any laws with misleading promotions but the OFT did identify “inconsistencies” in the interpretation of existing regulation. It hopes the new guidelines will bring consistency and ensure that promotions reflect “the spirit as well as the letter of the law”.

Clive Maxwell, OFT chief executive, says: “Household budgets across the country are under pressure and shoppers should be able to trust that special offers and promotions really are bargains. Prices and promotions need to be fair and meaningful so shoppers can make the right decisions.”

The OFT will continue to monitor supermarket promotions and work with local Trading Standards Services and the Trading Standards Institute to make sure that guidelines are heeded.

The OFT’s 2010 Advertising of Prices study kick started the industry wide investigation into promotional practices. It then used mystery shopping exercises, a consumer survey, a round-table attended by consumer groups, industry associations and the supermarkets to develop new guidance.

Tesco and the Co-operative Group both say they are committed to clear pricing and helping customers understand promotional offers.

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