How supermarkets are utilizing ‘rip-off’ loyalty pricing practices

Boots and Superdrug are among the worst shops for using ‘rip-off’ loyalty pricing practices, as they bump prices higher days before offering ‘discounts’, a new report has warned.

Beauty retailers and supermarkets, including Sainsbury’s and Tesco, have been accused by consumer group Which? of using their loyalty card schemes to artificially hike prices for non-loyalty shoppers.

An analysis of more than 12,000 products found a number of items that were priced more expensive than previously despite being marketed as loyalty promotion deals.

Loyalty card schemes appear to offer good value for money, as shoppers can build points and access discounted prices.

But more than half of shoppers believe non-member prices are higher than the usual prices for products at a certain store, a survey has found.

Beauty retailers and supermarkets, including Sainsbury’s and Tesco , have been accused by consumer group Which? of using their loyalty card schemes to artificially hike prices for non-loyalty shoppers

Supermarkets have previously come under fire for the schemes, which offer lower prices to customers who sign up, but punish those who cannot or do not wish to.

The new report has found that prices for some 649 items at Boots were raised for non-members on the same day that a loyalty promotion began.

In one of the worst examples, an oral-B iO7 blue electric toothbrush at Boots was priced at £400 for non-members and £150 for its loyalty card members in May.

However, the toothbrush was priced at £400 for all customers for just 13 days before the offer came into play – before that it was £150 for all shoppers. The price has therefore been bumped up by £250 for non-loyalty shoppers.

Meanwhile at Superdrug, the Olay Ultimate Day and Night Duo bundle has been sold at £71.98 for non-members and £59.99 for loyalty card members. 

But the product was only priced at £71.98 for 13 days before the membership price was introduced to give the appearance of a discount for loyalty card members.

Prior to this, the bundle had been sold at £35.98 for all shoppers.

At Tesco, Ambre Solaire Sun Cream Spray was sold for £6 to loyalty members and £8 to non-members – but it had only been £8 for 14 days prior to the offer. It was £6 for all before this.

At Sainsbury’s, Young’s Chip Shop Omega 3 Fish Fillets were sold to members for £2.50 and £4 for non-members but just 21 days before they were priced at £3.50 for everyone.

Shops have also been found guilty of keeping loyalty deals on the market for six months at a time. This indicates that the ‘loyalty’ discount may not offer the value for money that they appear to, the group said.

In one of the worst examples, an oral-B iO7 blue electric toothbrush at Boots was priced at £400 for non-members and £150 for its loyalty card members in May

At Tesco, Ambre Solaire Sun Cream Spray was sold for £6 to loyalty members and £8 to non-members – but it had only been £8 for 14 days prior to the offer. It was £6 for all before this

At Tesco, Ambre Solaire Sun Cream Spray was sold for £6 to loyalty members and £8 to non-members – but it had only been £8 for 14 days prior to the offer. It was £6 for all before this

Meanwhile at Superdrug, the Olay Ultimate Day and Night Duo bundle has been sold at £71.98 for non-members and £59.99 for loyalty card members

Ele Clark, Which? retail editor, said: ‘The majority of discounts were not misleading but there were some questionable non-member prices and some examples that looked like an outright rip-off.

‘Meanwhile some products were always, or almost always, on loyalty promotion, making it difficult to spot a genuine deal.’

Which? has urged the Competition and Markets Authority (CMA) to clarify how consumer law is applied to loyalty pricing – and use its new powers if businesses break rules.

The regulator is set to gain powers to hit businesses with direct fines for UK consumer law breaches.

Supermarkets use loyalty cards to track customers’ shopping habits and harvest their personal information.

Anyone who signs up must agree to the privacy policy, which typically includes sharing your data with food brands and, in some cases, advertisers.

In response to the Which? report, all shops named said they followed industry pricing guidelines to offer good value.

A Boots spokesman said: ‘We have always been committed to offering customers great value, helping them save money across their health and beauty needs.’

A Superdrug spokesman said: ‘Our products are regularly on a mixture of member’s only prices, multibuy promos, and price promotions open to all, to ensure all our customers can make savings. We regularly compare prices in the market to ensure they are competitive.’

Sainsbury’s said its shoppers understand factors such as inflation and promotions affect pricing.

A Tesco spokesman said its Clubcard Prices promotions follow strict rules to ensure they represent genuine value while the Co-op said no base prices were increased to accommodate for its member pricing.