A consumer group has reported Tesco to the competition regulator as officials continue their inquiry into whether the grocery sector is ripping off shoppers.
Which? said it had gone to the Competition and Markets Authority (CMA) to complain about a lack of clear pricing on the “vast majority” of the retailer’s food and drink promotions amid the cost of living crisis.
It claimed the UK’s largest supermarket chain could be breaking the law. Tesco has strenuously denied that suggestion.
Concerns centre on the retailer’s use of so-called unit pricing both in-store and online.
This is the small print on shelf prices which, for example, gives a price per 100g on things like jam – or per sheet for toilet rolls.
These unit prices help shoppers compare prices for the same products, which could be larger or smaller, to work out which is cheaper.
‘Tesco stands out’
Which? accuses Tesco of a lack of transparency and says that is making life more difficult for hard-pressed customers.
It said that Tesco’s decision not to display unit pricing on its Clubcard offers could be a “misleading practice” under the Consumer Protection From Unfair Trading Regulations 2008 (CPRs).
A statement added: “Under the CPRs, retailers must also avoid ‘unfair commercial practices’.
“Which? believes under these rules unit prices could be seen as ‘material information’ which most people would need in order to make an informed decision about how to get the best value from what they are buying.
“Which? has found issues with unit pricing across all supermarkets but Tesco stands out as it consistently omits unit pricing from Clubcard offers, which now account for almost all promotions it offers on groceries.”
Are businesses making inflation worse?
There’s no evidence supermarkets are profiteering
Is ‘greedflation’ keeping prices high?
The group raised the complaint as the CMA investigates whether supermarkets are making excess profits through inflated prices.
The supermarket sector has denied fuelling so-called “greedflation” – while early work by Sky News on the issue suggested there was little evidence of profiteering during the first quarter of the year.
Nevertheless, food inflation has been the sticky element of the main Consumer Prices Index (CPI) measure this year, keeping the rate at a higher level than had been expected and intensifying the squeeze on household budgets.
The latest reading for food and non-alcoholic drink inflation by the Office for National Statistics (ONS) showed it was still running above 19% during the year to April.
The government is desperate to bring food inflation down as it works towards a voter pledge to halve the overall rate of inflation this year.
Ministers are considering the idea of a cap, while bringing pressure on the wider food industry to act.
The sector argues that taxpayer aid for the supply chain’s energy costs will help ease prices significantly.
Tesco rejects accusation of ‘confusing’ labelling
Tesco, which is due to update the City on its trading performance in a week’s time, told Sky News it had followed all statutory guidance on the unit price issue.
A spokesperson said: “Providing great value and clear pricing is really important to us. We always take care to ensure we are compliant which is why we asked Trading Standards to review our approach on Clubcard Prices.
“They formally endorsed our labelling, confirming it meets the current legal requirements and guidelines.
“We are supportive of calls for greater clarity on the regulations in this area, in the interests of both businesses and consumers, and are actively looking at how we can make the way we display pricing even clearer for our customers.
“However, given that we are complying with all the current rules, we are disappointed that Which? has chosen to make these ill-founded claims against our Clubcard Prices scheme, which helps millions of households get great value week-in, week-out, and could save shoppers up to £351 per year.”
But Which? head of food policy Sue Davies said: “Tesco’s unclear Clubcard pricing is at best confusing for shoppers struggling with soaring food inflation and at worst, could be breaking the law.
“This is simply not good enough from the UK’s biggest supermarket.
“Tesco should think of its customers and act now to introduce clear unit pricing on all offers, including Clubcard promotions, so shoppers can easily find the best value items.”
A CMA spokesperson responded: “Our current review of unit pricing is considering the issue of how supermarkets provide unit price information for products on promotions, including loyalty promotions.
“We will set out our findings in July.”