Asda criticised over pricing by watchdog

The Competition and Markets Authority (CMA) has criticised Asda as part of its enquiry into pricing tactics. Whilst all major supermarkets have agreed to change pricing strategies, Asda was the only company required to provide a written commitment to implement such changes. The company has agreed to alter the way it promotes deals such as multibuy offers. The CMA’s enquiry follows the supercomplaint launched by consumer group Which? last year against food retailers. Which? accused companies of promoting misleading deals and confusing offers. Asda must implement the changes by August of this year. The Department for Business, Innovation and Skills (BIS) is to consult with the CMA following the latter’s call for a review of legislation on unit pricing.

Asda has been publicly criticised by the competition watchdog in the final stage of its response to a “supercomplaint” about misleading pricing by big supermarkets.



The chain has agreed to change its promotions, including multibuy deals, after the Competition and Markets Authority (CMA) singled it out during an investigation into pricing tactics.



The regulator said all big grocers had agreed to modify their pricing, but Asda was the only one asked to provide a written commitment to industry guidelines.



The CMA’s response follows the first supercomplaint against the grocery sector, launched by consumer group Which? last year, based on a dossier of “dodgy multibuys, shrinking products and baffling sales offers” sent to authorities.

Which? claimed that supermarkets were pushing illusory savings and fooling shoppers into choosing products that they might not have bought if they knew the full facts.

“The CMA’s examination of the market, following the supercomplaint, found that supermarkets generally take compliance seriously, but there were some promotional practices that could mislead shoppers,” said Michael Grenfell, the CMA’s executive director of enforcement.

“We welcome the commitment we have received from Asda as well as the engagement from other supermarkets, and expect them all to ensure that their practices are not misleading and that shoppers are better informed and able to choose the products that most suit their needs.”



The Which? executive director, Richard Lloyd, said: “Following our supercomplaint last year, we are pleased to see the CMA investigation has resulted in Asda taking action to stop misleading special offers. Asda has been found breaking the rules and now must immediately clean up their act.

“Our supercomplaint and actions taken by the authorities should serve as a clear warning to all retailers. If they try to pull the wool over consumers’ eyes, they will not get away with it. Retailers must get their house in order.”

Alex Chisholm, the CMA’s chief executive, said: “This draws the CMA’s follow-up work to the supercomplaint to an end. In addition to our work with Asda and the other retailers, we are pleased to see that our recommendations concerning the key legislation and guidance in this area are being taken forward.

“The Chartered Institute of Trading Standards is currently working on a revision to the pricing practices guide and the Department for Business, Innovation and Skills has indicated that it intends to consult, following our recommendation that it review the legislation and guidance on unit pricing.”



The CMA said Asda had already started making changes to the operation of its was/now and multibuy promotions. These should be fully implemented by August 2016 and the CMA will check how they are working six months later.

Andy Clarke, the Asda chief executive.

Asda’s chief executive, Andy Clarke, said: “We are consistently recognised as the UK’s lowest price, full-range supermarket, offering prices that are at least 10% less than those of our rivals. Asda has won the Grocer 33, the most credible pricing measure in our industry, for the last 18 years and we’re pleased that the CMA has today recognised that we take pricing compliance seriously.”

Clarke said all supermarkets had been asked to review their pricing practices and make any necessary changes, adding: “It’s important that customers know that the CMA did not make any findings against Asda and it hasn’t questioned our commitment to everyday low prices.”

The struggling retailer recently confirmed plans to cut up to 500 jobs in stores and 250 at its head office in Leeds, as it tries to protect profits while sales slide amid competition from the discounters.

In February, Asda revealed its worst quarterly sales fall, with sales down by 5.8% at established stores in the 13 weeks to 1 January. It was the sixth consecutive quarter of declining sales for Asda and marked it out as the worst performer of all the big grocers over the Christmas period.

The CMA has not ruled on whether supermarkets’ pricing and promotional practices have breached consumer law, however, saying this is a matter for the courts.

Exposed by Which? – Asda’s misleading pricing

● Hovis medium sliced soft white bread (800g), which was sold at “£1 (was £1.20)” even though the price before the offer started was £1, and the product had not been sold at £1.20 for 116 days

● Robinsons orange fruit squash (1l), which was increased to £1.49 or £1.59 individually while on “two for £2.50” several times during 2014, but cost £1 for most of the year

● L’Oréal Paris Elvive nutri-gloss shine shampoo (250ml). Asda’s individual price increased to £2.80 or £2.89 while on “two for £4” several times during 2014, but it cost £2 or less almost every day when it wasn’t on offer as a multibuy

● Gillette Venus 2 disposable razors. Sold at £2 in Asda for 37 days, then 97p (“was £2”) for 86 days

● McVitie’s classic rich tea biscuits (300g), McVitie’s digestive biscuits (500g), McVitie’s Hobnobs (300g) and McVitie’s ginger nuts (250g). The price on these biscuits at Asda increased to £1.09 while on “two for £2” several times during 2014, even though they cost £1 or less for the majority of the year.