Consumer NZ says New World price labels are 'misleading'

Tuesday, 1 September 2020

The Government has created a reporting mechanism, pricewatch@mbie.govt.nz, so that members of the public can flag instances of price gouging by retailers.

Consumer NZ claims supermarket chain New World is misleading customers with its price labels.

The watchdog group’s head of research, Jessica Wilson, said New World was prominently displaying its “Clubcard price” as the main price of grocery items, while the regular price was in much smaller font and easier to miss.

Until recently, checkout operators could scan a temporary Clubcard for customers without one, which would allow all shoppers to access the loyalty scheme’s discounts. But that has since been stopped.

“We think it’s reasonable to assume [the Clubcard price] is what you’ll pay at the checkout. The regular price is shown on the label but in much smaller font. You almost need to squint to see it,” Wilson said.

* New World Clubcard or Countdown's OneCard - which is better?

Consumer NZ says the regular price is easy to miss because the club deal is displayed more prominently.

* Frequent flyer, loyalty programmes in the sights of Australian watchdog

“The confusion doesn’t end there. A product that’s a ‘Club Deal’ one week may be labelled a ‘Saver’ the next, even though the price hasn’t changed. You need a card to get the Club Deal price but not to get the Saver price, even when it’s the same amount.”

Wilson said it was “disappointing” that the supermarket chain’s owner, Foodstuffs, hadn’t addressed these issues and Consumer NZ would be making a complaint to the Commerce Commission about the price labelling.

A Foodstuffs spokeswoman said it had removed temporary Clubcards from checkout counters after “lots of communication” with customers about the loyalty programme.

A Foodstuffs spokeswoman says New World supermarkets removed temporary Clubcards from checkout counters after “lots of communication” with customers.

The spokeswoman disagreed with Consumer NZ’s claims and said it failed to point out that other retailers offered loyalty programmes.

“All supermarkets and many other retailers nationwide have loyalty programmes that require customers to sign up to access the benefits. This is standard practice and consumers have been enjoying the types of benefits associated with supermarket loyalty programmes for years,” the spokeswoman said.

“To insinuate that we are misleading customers is completely false.”

Wilson said she was concerned by the pricing tactics of supermarket competitors Countdown and New World regarding their promotion of loyalty scheme discounts.

“Both chains use a confusing array of discounts and promotional signs to tempt shoppers. However, we’ve found products can be discounted so often, consumers risk being misled about the savings they’re actually getting,” Wilson said.

“To get loyalty scheme discounts, shoppers also have to agree to share their personal data with the stores. Supermarkets reserve the right to share this data with various undisclosed third parties. Collecting customer data is really the main purpose of these kinds of loyalty scheme.”

A Countdown spokeswoman said the supermarket aimed to ensure its prices were clear, accurate and unambiguous for its customers.

Countdown’s Onecard programme had strict privacy and data protections in place, she said.

“Countdown has long been committed to displaying unit pricing that makes it easy for our customers to compare prices,” she said.

“All of our prices nationwide are also publicly available on our online shopping site and this includes labelling whether they’re on special or part of our ‘Great Price’ range, and the usual shelf price so customers know what they are saving.”