Supermarket loyalty programs DO offer real savings of up to 25%, the competition watchdog says
- The competition watchdog has ruled that loyalty programs do not drive up costs
UK supermarket prices offered through loyalty programs deliver real savings, the competition regulator has said.
Supermarket loyalty prices have been reviewed by the Competition and Markets Authority amid fears the schemes may have turned off shoppers.
Loyalty price discounts are seen by many as the ‘real’ cost of food, with the undiscounted price being a hefty markup for people who haven’t signed up.
The vast majority of UK consumers are now taking advantage of these schemes, which cover an increasing number of products.
Loyalty programs such as Clubcard from market leader Tesco and Sainsbury’s Nectar offer significantly lower prices for members and have proven hugely successful for Britain’s largest supermarkets.
And today the CMA said it had analyzed around 50,000 supermarket promotional products and found very little evidence that supermarkets were inflating their ‘usual’ prices to make loyalty promotions seem like a better deal.
Checkout crisis: The growth of loyalty programs at supermarkets has been criticized by consumers and consumer advocates, who suspected that the discount prices were actually the real deal
The CMA found that consumers can save an average of 17 to 25 percent by purchasing loyalty price products from the five supermarkets surveyed: Tesco, Sainsbury’s, Waitrose, Co-op and Morrisons.
“We know that many people don’t trust loyalty card prices, so we did deep research to find out whether supermarkets were treating their customers fairly,” said George Lusty, CMA’s interim director of consumer protection.
‘We found that almost all loyalty prizes reviewed offered real savings over the usual price – a fact we hope will reassure consumers across the UK.’
However, Lusty noted that the CMA’s research had shown that loyalty prizes were not always the cheapest option, and advised customers to shop around.
A survey by consumer champion Which? has discovered that a large number of customers do not have access to these cheaper prices because they cannot sign up for loyalty programs.
Millions of shoppers are excluded from signing up due to criteria often beyond their control – minimum age requirements, having a UK residency or address, and needing an email address or app.
Researchers found that customers must be over 18 to take part in programs at Lidl, Sainsbury’s, Tesco and Waitrose, but at Co-op and Morrisons they only need to be 16.
Shoppers under 16 can sign up for a junior membership at Co-op or Sainsbury’s or be added to a parent or guardian’s account to access the cheaper price tier.
In July, the CMA said it did not expect to find widespread evidence of promotions misleading consumers.
