Opinion

Transparency isn’t optional: Just ask Asda what misleading price promotions can do

4 min read

28 April 2016

The Competition and Markets Authority (CMA) has recently suggested supermarket prices and promotions “have the potential to confuse or mislead consumers, which could be in breach of consumer law”. We took a particular look at how Asda’s pricing tactics may be a ticking time bomb for the sector.

Ever heard of the old saying “trust is hard won and easily lost?” Well, let’s just say Asda has become acquainted with the sentiment.

Cracks in the supermarket model are beginning to show. The horsemeat scandal, the knowledge that two for the price of one deals result in 50 per cent of the world’s food never making it onto the supermarket shelf, not to mention Tesco’s fake farm food label confusion, has raised questions of the accountability of supermarkets. And to add fuel to the fire, it seems Asda has been singled out by the CMA for its pricing practices. 

In particular, the CMA concluded that when it came to “then/now” deals, Asda’s “now” prices were advertised for longer than the “was” price, making it difficult for consumers to make a meaningful comparison. Also, multi-buy offers immediately followed “was/now” promotions and didn’t always represent better value than a single product before the offer.

Needless to say, our trust in the supermarket model to provide us with fresh, healthy and affordable food is at an all-time low. This was the subject of a 2014 article written by The Guardian’s Joanna Blythman, who said people were growing sick of being hoodwinked by the smoke-and-mirrors promotions of supermarket chains. She also surmised that consumers suspect they are being “diddled” into spending more and are voting with their feet.

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The solution to this supermarket time bomb is simple: More transparency will increase trust, and quite frankly customers expect all food companies to be transparent about everything from production practices to ingredients. But while these factors may be excused every so often, businesses need to learn that in the era of the price-conscious shopper, you don’t tamper with discounts – a lesson Asda is learning the hard way.

It’s true that while an investigation of Asda’s “then/now” prices have afforded it some negative publicity, it’s far more important that retailers are held to account for misleading and confusing customers with offer marketing and price promotions.

There are hundreds of misleading offers on the shelves every day that do not comply with the rules. This puts supermarkets on notice to clean up pricing practices or face legal action – Tesco, Sainsburys and Morrisons also garnered a slap on the wrist.

Consumers will always want value for money when purchasing, but equally they want transparency and honesty from retailers – and it seems retailers aren’t delivering this. Brands, marketers and companies need to keep customers at the center of thought. After all, in a competitive sector where price matters and a large percentage of groceries are sold on promotion, marketing teams need to be authentic – and demonstrate value to customers when determining what marketing communications to use.

Brands undeniably need to consider what impact this will this have on customer loyalty.

Now more than ever, retailers need to secure a long-standing relationship with customers in order to stand up to discount disruptors such as Aldi and Poundland.

Similarly, discount retailers looking to upset the monopoly held by the big four supermarket brands must have complete confidence in the supply chain. If this can’t be guaranteed then these firms must be prepared to re-evaluate existing relationships and in some cases walk away if the supplier isn’t able to demonstrate visibility.