Is it really a discount? Supermarket specials offered too often, Consumer NZ says
Wednesday, 5 August 2020
Consumer NZ says some supermarket products can be on “special” so often that shoppers risk being misled about the savings they are getting.
It has completed its latest 12-week price survey.
Consumer NZ chief executive Jon Duffy said price promotions had become so common that shoppers had good grounds to question whether the discounts were real.
Despite the high degree of market concentration, the supermarket sector had failed to attract much scrutiny, Duffy said.
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It was time for that to change, he said. The Commerce Commission should use its market study powers to investigate the supermarket industry, Duffy said.
“New Zealand has one of the most concentrated supermarket industries in the world, with two big players dominating the market. That degree of concentration brings with it the risk consumers will end up paying higher prices.”
Consumer NZ tracked online prices for a basket of 22 grocery items for 12 weeks at Countdown, New World and Pak ’n Save stores in Auckland and Wellington.
“Many of the items we tracked were routinely discounted. While genuine price promotions are good for consumers, we found specials are not always as special as supermarkets would like us to believe,” he said.
When the price of a product was regularly reduced, the special price was really its usual selling price, Duffy said.
At Pak ’n Save, the majority of the 22 products that Consumer NZ tracked were on special six or more times, according to the survey.
At New World, half the items were on special on six or more occasions.
Countdown’s specials varied and anything from two to 10 items were on special each week.
At New World, Vogel’s, Ploughman’s Bakery and Nature’s Fresh loaves were on special 11 out of 12 weeks.
At Pak ’n Save Lower Hutt, Nature’s Fresh bread had an “extra-low” price of $2.99 for all 12 weeks.
Consumer NZ researchers bought Persil Front & Top Loader Sensitive Laundry Powder 2kg and Palmolive Dishwashing Liquid 500ml on sale for five weeks at Countdown and six weeks at New World.
At Pak ’n Save, the two cleaning products had an “extra-low” tag every week but the “extra-low” price varied over the 12 weeks.
In Wellington the Persil laundry powder ranged from $8.88 to $11.99 and in Auckland from $8.99 to $11.79, the survey found.
Other products regularly on special included yoghurt, canned tuna, cheese and tea bags, Consumer NZ said.
Stores enticing customers with price promotions had to be offering a genuine deal, Duffy said.
If the special was not genuine, supermarkets risked breaching the Fair Trading Act.
Supermarkets used a confusing array of terms in their price promotions, which made it harder for shoppers to gauge whether they were getting a genuine discount, Duffy said.
A spokeswoman for Countdown said the company always aimed to ensure that its prices were “clear, accurate and unambiguous for our customers”.
It was committed to displaying unit pricing that made it easy for customers to compare prices.
“As a side note, at the time this price survey was undertaken, we believe there would have still been some impacts in the market from New Zealand’s Covid-19 lockdown which is why there were a couple of products on special more frequently than normal,” the spokeswoman said.
Foodstuffs corporate affairs head Antoinette Laird said the company worked hard to ensure the pricing of products was communicated in a clear and concise way.
“Stores offer a combination of national, regional and store-specific specials, and stores are provided with regular advice to ensure they meet their legal obligations on saving claims,” Laird said.