Update on Misleading Pricing

In July of last year we reported on a study undertaken by the Competition and Markets Authority ("CMA") into pricing practices in the supermarket sector that were potentially in breach of consumer law. The investigation by the CMA followed a super-complaint by the consumer group Which?

The key legislation in this area is the Consumer Protection from Unfair Trading Regulations, which prohibit businesses from engaging in commercial practices that are unfair to consumers. If businesses mislead consumers or undertake commercial practices which then cause a consumer to make a decision to buy a product which they would not otherwise have done, there may be breaches of the Regulations.

Following its investigation last year, the CMA cited various examples of pricing practices undertaken by supermarket chains that could be in breach of the Regulations. In particular, the CMA had concerns about misleading unit pricing (i.e. where goods are priced per gram or per litre, to supposedly make comparisons easier), which the CMA found was not always helpful to consumers as there were several instances where incorrect size and weight criteria were used.

The CMA further highlighted issues in terms of the use of "was/now" promotions, where a new, reduced price is compared to a price charged previously. The CMA identified various instances of misleading practice in this area, such as reliance on "old" prices which had only actually been used for a very short period of time and therefore did not provide a genuine price comparison.

In findings published by the CMA this week, following continuing liaison with the supermarket chains in the wake of last year's study, the CMA found that certain supermarkets were still using promotional practices that could mislead consumers and has set targets for some retailers to examine and review their pricing strategies prior to an August deadline.

The CMA's continuing involvement in pricing practices in the retail sector highlights the need for business to ensure that the pricing information given to consumers is fair and accurate, and to avoid the use of marketing strategies that could potentially be misleading, and in breach of consumer law.

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.