Commerce Commission receives 31 complaints about supermarket promotions and pricing in six weeks

Friday, 16 December 2022

A Palmerston North shopper has complained to the Commerce Commission after he came across legs of lamb advertised as 'better than half price' – but the label suggested otherwise.

The Commerce Commission has received 31 complaints about supermarket pricing and promotions in the last six weeks.

A Countdown shopper complained to the commission this week after he came across legs of lamb advertised as 'better than half price' when the label suggested otherwise.

The lamb was marked down to $10.40/kg with a saving advertised of $12.10/kg. But the actual marked price on the lamb showed the regular price was $11.90/kg.

”Normally I don't care about pricing errors, but this seems pretty egregious. The price they charge is not far off an ordinary price, so it's blatantly false to claim that it's 50% off,” he said.

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A Countdown spokesperson said its lamb price in the North Island this week was $10.40kg, down from a usual retail price of $22.50.

“Unfortunately there was a mistake with the in-store ticketing put on the product, although the ‘better than half price’ claim was correct. We have been in touch with the team, and they have now fixed the issue.”

Commerce Commission general manager fair trading Vanessa Horne said since November 1 the Commerce Commission had received 12 inquiries related to Countdown’s pricing and promotional practices and 19 related to Foodstuff brands New World, Pak ‘n Save and Four Square.

This included the allegation made about conduct by Countdown Palmerston North.

“We have not yet assessed this specific inquiry and therefore cannot comment as to the nature of the ‘sale’ and whether it potentially raises a concern under the Fair Trading Act.

“However, as with all inquiries and as part of our assessment process, we are reviewing the information received.”

Countdown says some of the labelling was incorrect.

While businesses can set their own prices for products and services, it is important that they make sure the pricing is clear, accurate and genuine, she said.

“If a business advertises a product at ‘half price’ or on ‘special’, then this must be genuine, unambiguous and not promoted in a way that entices consumers to make a purchase believing it offers a better discount than it really does.”

Otherwise, it risks misleading consumers and breaching the Fair Trading Act.

An example of where the commission had taken action against this conduct was in its recent Strandbags case, where the bag retailer was fined $780,000 for misleading consumers with its discounting and sales practices.

Earlier in the year Countdown said it was looking to rolling out electronic price labels in more stores to avoid issues like this.

The electronic system allows shelf labels to update automatically when there is a price change, rather than being manually updated.

Meanwhile, Foodstuffs has moved to reduce the different types of pricing tickets, and shifted away from more frequent use of promotions to a standard “every day low price” scheme.

It also agreed with the Commerce Commission’s recommendation in its final grocery sector report to mandate the consistent display of unit pricing to help consumers to make informed purchasing decisions.