In a recent evaluation released by the Competition and Markets Authority (CMA) in the United Kingdom, the agency asserts that supermarket loyalty cards indeed provide substantial savings, but shoppers are encouraged to continue shopping around to ensure they are getting the best deals. The CMA’s thorough investigation scrutinized 50,000 products across several major supermarket chains, including Tesco, Sainsbury’s, Morrisons, Co-op, and Waitrose. This extensive review highlighted vital insights into the effectiveness and overall perception of loyalty pricing.
The CMA discovered that there was “very little evidence” indicating that these supermarkets artificially inflated their regular prices to create a façade of significant discounts during promotional events. This finding is critical as it suggests that the discounts offered through loyalty programs are, for the most part, legitimate. Despite this, the report also revealed a shocking statistic: many consumers maintain a lack of trust regarding whether these loyalty offers truly represent a more economical choice compared to standard prices.
George Lusty, the interim executive director of consumer protection at the CMA, emphasized this issue of consumer mistrust. In an attempt to address this concern, he mentioned that the authority undertook a comprehensive examination to ascertain whether or not supermarkets were engaging in fair practices with their pricing strategies. While loyalty pricing, where customers encounter two different prices for a product—one for those without a loyalty card and a lower one for those with one—might appear reasonable, misconceptions about their savings persist.
Among the findings, the CMA noted that roughly 90% of the loyalty promotions it assessed genuinely offered savings compared to the usual prices found in-store. Customers benefitted from an average discount ranging from 17% to 25% across the five supermarkets included in the study. Moreover, nearly 70% of shoppers surveyed expressed their belief that loyalty pricing indeed offers respectable savings. Nevertheless, a substantial portion of consumers, approximately 40%, reported a deep-seated skepticism, asserting they didn’t trust that these loyalty prices genuinely reflected real savings.
Interestingly, the CMA’s investigation extended to several retailers but ultimately did not evaluate two of the UK’s leading supermarkets, Asda and Aldi. Asda has a system of loyalty points that customers may gather to redeem for vouchers, though it does not implement reduced product pricing for loyalty card holders. Aldi, alongside Lidl, was omitted from the review primarily because their business models lack online retailing and do not maintain a wide enough selection of branded products for an effective comparison against others.
The report’s insights compelled further dialogue in the consumer advocacy space, with the consumer group Which? recognizing that the practice of two-tier pricing has become prevalent among retailers. They expressed contentment over the confirmed possibility for authentic savings through loyalty programs. However, analysis from Which? delved deeper, revealing that numerous instances of loyalty pricing promotions do not translate into true value, cautioned Sue Davies, the head of food policy at Which? This sentiment is underscored by concerns regarding exclusivity; millions of consumers might miss out on lower prices simply because they have yet to enroll in a loyalty program or download an app.
In conclusion, while the findings of the CMA provide reassurance that shoppers can indeed find value in supermarket loyalty cards, the prevailing skepticism among consumers highlights a critical gap in confidence that food retailers must address. It appears evident: although loyalty programs can offer discounts, consumers should maintain informed shopping habits and remain vigilant, comparing prices to ensure they maximize their savings.
