:00:16. > :00:21.Supermarket price war, don't you believe it. Perhaps it makes the
:00:21. > :00:27.shopping experience more exciting. It doesn't necessarily make it
:00:27. > :00:34.cheaper. Confusing claims. Misleading ads. I believe what they
:00:34. > :00:42.tell me on the packet, wrongly. think they find ways of making you
:00:42. > :00:50.spend more. Deals that save you nothing I admire the brazen nerve
:00:50. > :00:56.to present something as a great deal when in fact it has gone up in
:00:56. > :01:01.price. Everywhere you look there are special offers. And Panorama
:01:01. > :01:05.sees how some of the biggest names stand accused of breaking the law.
:01:05. > :01:15.There's a potential for prosecutions to be brought against
:01:15. > :01:41.
:01:41. > :01:48.8 0sthou thousand -- 80,000 square feet, 40,000 product lines. Opening
:01:48. > :01:53.day at Tesco's brand new super store in Sheffield. This launch
:01:53. > :02:01.comes as household budgets are under increasing pressure and amid
:02:01. > :02:05.a ferocious PR war in which the Big Four compete for the title of UK's
:02:05. > :02:15.cheapest. Sainsbury's offers to refund the difference on branded
:02:15. > :02:17.
:02:17. > :02:25.goods if they can be found cheaper elsewhere. Moirzens promotes its
:02:25. > :02:32.pris crunch campaign while ASDA offers to sell goods 10% cheaper
:02:32. > :02:39.than the rivals. Tesco pledges to cut the cost of thousands. It was
:02:39. > :02:46.quite a few bargains. We have not - - you got your washing powder.
:02:47. > :02:51.I got was a special offer on ketchup. You can't turn your nose
:02:51. > :02:55.up on it. Good deals according to some customers. Cut throat
:02:55. > :03:00.competition according to the headlines. In which price war is
:03:00. > :03:05.truth the first casualties? there was a price war going on at
:03:05. > :03:10.the moment we would see profits falling or see severe warnings.
:03:10. > :03:15.That's not happening. What we're seeing is more about using the
:03:15. > :03:20.marketing budget as effectively as you can. The name of the game is to
:03:20. > :03:26.be as clever as possible how you promote and use your discount and
:03:26. > :03:30.adrabgt your customers. If the latest promotions really are about
:03:31. > :03:39.marketing and the supermarkets profits are unaffected, what is the
:03:39. > :03:43.reality behind the savings? Tonight we will find out, we'll study
:03:43. > :03:49.supermarket promotions in detail and reveal the hidden catches and
:03:49. > :03:58.ask the hidden giepbs are -- giants are breaking the promises or the
:03:58. > :04:06.laws to designed to protect us, the consumer. Michael and Beatrice Bond
:04:06. > :04:15.do their regular big shop at Tesco. Week by week their trolley of items
:04:15. > :04:23.hardly changes. I would think we spend between �6013 -- and �70 a
:04:23. > :04:30.week. -- 60... We figured our prices would come down. Most of the
:04:30. > :04:35.items are basic items. Tesco's price campaign started at the end
:04:35. > :04:43.of September. At Tesco we're dropping the price of 3,000 items.
:04:43. > :04:50.As customers like the Bonds have noticed other products have been
:04:51. > :05:00.going up This Creamfields cream three months ago it was 65 pence,
:05:01. > :05:02.
:05:02. > :05:09.and now 68 pence. And this was 87 before and 94 now. The unsalted
:05:09. > :05:18.butter they are saying is �1.10 a pack. We have a receipt back from
:05:18. > :05:24.April, and the unsalted butter is 98p. This has gone up 12p a pack.
:05:24. > :05:29.They are creeping the prices up all the time. Tesco says it has spent
:05:29. > :05:35.�500 million on the latest price cuts. With price rises elsewhere,
:05:35. > :05:40.is it benefitting us as much as we think? We pick up things like 3,000
:05:40. > :05:45.products, you would think that sounds like I'll really benefit
:05:45. > :05:53.from that. 3,000 products in the context of a modern supermarket is
:05:53. > :05:58.less than 10% of all the products they stock. Tesco says as the big
:05:58. > :06:03.prise Drop is focused on staples, customers can make significant
:06:03. > :06:11.savings and customers are happy. It has slash the value of the Clubcard
:06:11. > :06:16.loyalty scheme to fund the cuts. Customers who used to get 2 points
:06:16. > :06:23.for every pound spent only get one. Supermarkets give you with one hand
:06:23. > :06:27.and take away with the other. Any time you get a good deal they
:06:27. > :06:34.compensate by charging something else more -- more for something
:06:34. > :06:37.else. Our loyalty for Tesco is being tested. We want straight
:06:38. > :06:44.pricing that is not complicated could people understand what they
:06:44. > :06:49.are paying for. We're constantly having to outwit the management of
:06:49. > :06:58.Tesco. Tesco deny misleading customers and say they are sorry
:06:58. > :07:02.the Bonds are unhappy. Everywhere you look there are special offers.
:07:02. > :07:09.You would feel something not being something on offer. Across the UK
:07:09. > :07:13.lots of other shoppers are unhappy, not just about Tesco. I can't work
:07:13. > :07:19.this out!. As customers we're confronted with thousands of
:07:19. > :07:25.promotions every time we set foot in a super store, we're confused by
:07:26. > :07:34.them and losing faith in them. my head I think it's cheaper.
:07:34. > :07:38.Thinking again. In a survey for Panorama, 42% of shoppers said they
:07:38. > :07:43.no longer trust supermarket discounts are genuine Sometimes you
:07:43. > :07:48.-- they make deals on things that you think I don't need it, but
:07:48. > :07:53.because it's a great deal, maybe I should get it. I think they're
:07:54. > :07:57.finding ways of making you spend more. This view is widely shared,
:07:57. > :08:03.while most people do still believe supermarket claims nearly a third
:08:03. > :08:11.of those in our survey said they're less likely to do so now than in
:08:11. > :08:17.the past. And 47%, almost half, said they felt mislead by various
:08:17. > :08:22.offers. I've come across stuff it's a yellow tag with a price on, and I
:08:22. > :08:28.thought it's an offer but it's not. You have not always the time to
:08:28. > :08:33.read through which one is good and not. Everything can't be that cheap.
:08:33. > :08:40.Although there's nothing wrong with supermarkets enticing us to stop
:08:40. > :08:47.there, they should be honest. The Advertising Standards Authority
:08:47. > :08:52.have found three of the Big Four misleading customers repeatedly. It
:08:52. > :08:58.has banned ten adverts from ASDA, and 16 from Tesco. I'll show you a
:08:58. > :09:08.couple of ads from newspaper, and national newspapers. The first is
:09:08. > :09:11.
:09:11. > :09:20.Tesco, and appeared in 2009. Last fry over 1.1 million customers were
:09:20. > :09:28.cheaper at Tesco and ASDA... ASA's judgment, this was misleading.
:09:28. > :09:37.Tesco did not analyse 1.8 million, it studied just 218,000. It didn't
:09:37. > :09:41.compare all the products in them. think it's cheeky, when someone is
:09:41. > :09:50.proclaiming something like that on television, I presume they have had
:09:50. > :10:00.a proper test. The ASA later banned the ad as well as this. She grabs a
:10:00. > :10:09.
:10:10. > :10:16.the price guarantee did not apply to certain items. So what do you
:10:16. > :10:22.make of that? A -- I'm lost for words. I don't know what to think.
:10:23. > :10:29.They're pushing their luck. Seeing how far they can get away. It's
:10:29. > :10:37.surprising how much and to what lengths they go to. Some ads may
:10:37. > :10:42.look fine at first sight and the flaws in others are more obvious.
:10:42. > :10:47.These multi-buy deals offer no savings at all but they increase
:10:47. > :10:55.sales. People will look at that and think that is silly but I think it
:10:55. > :11:02.would work, yes. In 2thou 9 the Office of Fair Trading asked
:11:02. > :11:07.psychologist Ahmetoglu to report on how offers such as this influence
:11:07. > :11:12.customer behaviour. You would think no-one would go for that. Offers
:11:12. > :11:17.trigger a biological reaction. They are triggering the same reward
:11:17. > :11:23.system in the brain you have when you eat chocolate. The offer will
:11:23. > :11:28.attract your attention, and a lot of people won't look at the single
:11:28. > :11:34.unit price. That's a simple calculation. People don't calculate.
:11:34. > :11:40.They use a lot of automatic decision-making. In this case they
:11:40. > :11:46.would not be conscious of the fact they're being influenced. In number
:11:46. > :11:50.two they would subconsciously prime the consumer to buy a higher
:11:50. > :11:55.quantity. Supermarkets say they refer to a range of products so
:11:55. > :12:05.savings can be made. Others are the result of human error. And another
:12:05. > :12:06.
:12:07. > :12:13.kind of offer, the type that leaves me flummoxed. Look at these? It is
:12:13. > :12:21.so complex. That you would simply go for the simplest offer which is
:12:21. > :12:26.three for five. Marketers know the better they promote their products
:12:26. > :12:31.the more they are likely to sell. That's why they have special offers.
:12:31. > :12:35.That's their business. Perhaps it make the shopping experience more
:12:35. > :12:43.exciting. It doesn't necessarily make it cheaper. The supermarkets
:12:43. > :12:49.say they strife to offer value. One former regulator believes the
:12:49. > :12:55.techniques leaves consumers baffled. It's confusing. There's the
:12:56. > :13:00.illusion of value. Is that what they're -- we're about, no, we
:13:00. > :13:06.should be transparent. I don't believe the consumer is being
:13:06. > :13:10.intentionally mislead but the consumer is being confused. If we
:13:10. > :13:15.find cases where supermarkets are outside the law, they must be
:13:15. > :13:22.prosecuted. When does a merely confusing promotion become
:13:22. > :13:29.potentially more serious. Let's look at ASDA and the price
:13:29. > :13:36.rollbacks. An example of how all of us at ASDA are saving you machine.
:13:36. > :13:41.Not always, earlier this year, ASDA was caught offering 27 items as
:13:41. > :13:51.rollbacks when the prices have gone up. They apologised claiming a
:13:51. > :13:51.
:13:51. > :14:01.glitch in the system. Now Panorama has find problems in the deal the
:14:01. > :14:28.
:14:28. > :14:35.woe woe. There's items in the A good deal? Really? I'll let you
:14:35. > :14:43.decide. We have since checked the prices of some of the items lifted
:14:43. > :14:50.as Wow offers on ASDA's website. 11 had been on sale for the same price
:14:50. > :14:57.for at least six months. No savings there. These four items, actually
:14:57. > :15:04.more expensive nan they used to be. I admire the audacity of the brazen
:15:04. > :15:14.nerve of the soibgz to present something as a Wow deal when it has
:15:14. > :15:24.gone up in price. You have to clap. All promotions, all promotions must
:15:24. > :15:31.comply with protection. Parry par advised the government on how to
:15:31. > :15:36.incorporate a directive. A average consumer seeing something market as
:15:36. > :15:43.Wow ko would get the impression the price has been redepuesed. If it's
:15:43. > :15:48.a case the price has not been reduced it could be a breach of
:15:48. > :15:53.regulation five of unfair trading regulations. Your average consumer
:15:53. > :15:56.when they learned the truth that the price was not reduced and in
:15:57. > :16:02.fact had been increased almost certainly would not purchase the
:16:02. > :16:06.item. We have since contacted ASDA about the examples it found, it
:16:06. > :16:12.told us the products should not have been advertised at Wow offers
:16:12. > :16:20.and has removed them. In the so- called price war huge amounts of
:16:20. > :16:28.money are at stake. Of the 96 million we spent on groceries, �65
:16:28. > :16:34.million went through the tills of the Big Four supermarkets. At --
:16:35. > :16:41.Tesco is the biggest. Using data spried by mySupermarket we have
:16:41. > :16:45.been tracking a range of prices over the last months, and we have
:16:45. > :16:51.found instances of price establishing. A retailer sells a
:16:51. > :16:55.product for a certain price for a long period of time and suddenly
:16:55. > :17:03.raises it, and shortly afterwards it drops it back down then it can
:17:03. > :17:09.say it has slash the cost. It seems Tesco has been doing that as part
:17:09. > :17:16.of the big price drop campaign. Supermarkets are allowed to do it,
:17:16. > :17:22.as well as the price has been established for 28 days or along
:17:22. > :17:28.with consumer expectation. We found xlgs of Tesco breaching the rule.
:17:28. > :17:35.Take the supermarket's fresh chicken which freefps in the ads.
:17:35. > :17:44.In January customers could buy them for �4 each. That remain the case
:17:44. > :17:50.in February, March, April, May and June. In midJuly Tesco raised the
:17:50. > :17:55.price to �5 each and in September it went back to what it had been
:17:55. > :18:01.most of the year, Tesco labelled it a price drop. Are you concerned or
:18:01. > :18:07.surprised by what we found. An average consumer would not expect a
:18:07. > :18:13.price that had been consistent for many months suddenly to prize by �1
:18:13. > :18:18.to revert back to the -- price by �1 to revert back to be described
:18:18. > :18:22.as a price drop. If it could be established that the average
:18:22. > :18:27.consumer was being mislead it could lead to a criminal prosecution.
:18:27. > :18:34.Tesco told us it had acted in accordance with government pricing
:18:34. > :18:40.guidance. Misleading websites, questionable ads. What promotions
:18:40. > :18:47.are the companies peddling in store? Time for a undercover
:18:47. > :18:52.shopping trip. For soibgz in six hours. There are -- supermarkets in
:18:52. > :18:58.six hours. The first thing I noticed was how they priced the
:18:58. > :19:06.fruit and veg. It's confusing. are priced differently. On weight
:19:06. > :19:14.here and units there. In all supermarkets the loose items were
:19:14. > :19:21.priced per kilo but some packaged only gave a price per pack with no
:19:21. > :19:26.weight lifted. The only way to compare was to way -- weigh the
:19:26. > :19:32.pack and compare. Haven't time to do the maths really. Afterwards we
:19:32. > :19:40.had time to do the maths and examine the actual price
:19:40. > :19:50.differences. In Sainsbury's five bananas in a pact were �1, and
:19:50. > :20:00.buying five loose were 45p. It was the same with red onions in ASDA.
:20:00. > :20:01.
:20:01. > :20:11.86p per kilo for loose ones but 2.85 per kilo in a net. At Tesco
:20:11. > :20:11.
:20:11. > :20:20.gala apples �1.66 per kilo loose. � 2.14 per kilo in a bag. At Morrisey
:20:20. > :20:28.the other way around. Their Empire apples cost �1.82 a kilo in a bag.
:20:28. > :20:36.A good deal more if you bought them loose. Pity I couldn't work it out
:20:36. > :20:43.at the time! Despite the confusion all the supermarkets told us
:20:43. > :20:48.customers like being presented with different offers like this
:20:48. > :20:53.Supermarkets have been more disciplined in letting people know
:20:53. > :21:00.the price per unit as well as per pack. We have to be better at
:21:00. > :21:05.giving people the information they need to buy carefully and properly.
:21:05. > :21:09.The way supermarkets price fruit and veg may be confusing but it is
:21:10. > :21:17.allowed. What government guidance does not allow is advertising a
:21:17. > :21:23.price cut without displaying the previous price. At Morriseys my
:21:23. > :21:29.eyes were drawn to this -- Morrison -- my eyes were drawn to this price
:21:29. > :21:35.conditioner. I wonder why the old price wasn't on the label? Perhaps
:21:35. > :21:45.because it was lower than the previous. The condition may be �2
:21:45. > :21:53.now, but if I bought it two weeks before, it would have cost �1.65.
:21:53. > :21:56.Morrison said it was more earlier in the year. So �2 was still good
:21:56. > :22:02.value. The average consumer would be looking for a reduction. If the
:22:02. > :22:06.price was cheaper than the current offer in particular in the
:22:06. > :22:12.immediate past that would influence the consumer in making the decision,
:22:12. > :22:17.and if they knew the truth of it, and -- they might not make the
:22:17. > :22:25.purchase. I showed Parry par some of the other purchases I made.
:22:25. > :22:31.Including this one. Offering me a worse deal. 75 or three or �4.
:22:31. > :22:35.Offers like this can be the result of mistakes. Supermarkets say where
:22:35. > :22:42.individual products work out cheaper shoppers will be charged
:22:42. > :22:48.the lower price. These went through the till correctly. According to
:22:48. > :22:53.the survey others don't. 35% of shoppers said they found mistakes
:22:53. > :22:57.on bills with regard to promotions and discounts. If the multi-buy
:22:57. > :23:03.offer doesn't go through properly at the till there's a clear
:23:03. > :23:10.evidence of breach of regulations. One one expect supermarkets to
:23:10. > :23:16.programme the till correctly before they put the offer on display.
:23:16. > :23:23.my shopping trip I came across another promotion that breaches the
:23:23. > :23:29.regulations, one all four were guilty of. This is a bigger pack
:23:29. > :23:39.better value. If they got two of the smaller ones it's cheaper. The
:23:39. > :23:39.
:23:39. > :23:49.better value is put the big one back. At ASDA I found the tub of
:23:49. > :23:55.Clover... I could buy two tubs for a total of �3. Same amount, 2p
:23:56. > :24:05.cheaper. The same misleading claim with the same product was made as
:24:05. > :24:15.Morrisons, here the bigger pack was �is -- �1.70 more expensive. At
:24:15. > :24:16.
:24:16. > :24:23.Tesco it was Vanish, but three small ones for �9, and a big one
:24:23. > :24:32.for ��12. At Sainsbury's a further five examples. I can get
:24:32. > :24:38.Sainsbury's own cream of tomb co- soup, �1.99 for four cans. If
:24:38. > :24:48.you're eagle-eyed and work your way down the row, you can get the
:24:48. > :24:48.
:24:48. > :24:55.single cans, �46. Much cheaper than buying four cans packed up. It
:24:55. > :25:00.isn't. The supermarkets say they offer thousands of deals. When
:25:00. > :25:07.smaller packs are on promotion they may be cheaper for a short period.
:25:07. > :25:13.I found 17 examples of bigger packs presented as better value when they
:25:13. > :25:22.weren't. Five in Tesco, five in Sainsbury's. Four in ASDA. And
:25:22. > :25:27.three in Morrisons. All these stores are within eight miles of my
:25:27. > :25:34.home. How many more examples are out there. I'm normally walking
:25:34. > :25:41.around here with three kids. I last thing I can do is work out what is
:25:41. > :25:46.cheaper. I believe what is on the packet. The supermarkets told us
:25:46. > :25:51.value labels are often put on by the manufacturers and ASDA says
:25:51. > :25:59.they're working with them carefully to resolve this issue. They all
:25:59. > :26:05.said they display big and small packs, so shoppers are compare them.
:26:05. > :26:10.Some were genuine mistakes. The law on this area is very clear. It is
:26:10. > :26:14.unlawful to make claims that are misleading or actually false and
:26:14. > :26:21.that are persuading consumers to make the wrong choice. What worries
:26:21. > :26:25.you the most. It is not just the occasional mishap here. There are
:26:25. > :26:29.repeated examples with many, many products in different locations
:26:29. > :26:33.with different supermarkets and all of them seem to be doing the same
:26:33. > :26:40.thing. So there's a potential for prosecutions to be brought against
:26:40. > :26:45.all of them. And it is not as much they haven't been warned that could
:26:45. > :26:50.happen. A year ago this year the Office of Fair Trading told
:26:50. > :26:58.retailers to clean up their products with relation to
:26:58. > :27:05.misleading prices. And the OFT promised to take eneno --
:27:05. > :27:12.enforcement action. 12 months on the OFT has told Panorama they will
:27:12. > :27:16.be concerned about misleading offers. Tesco defended the price
:27:16. > :27:24.rises before the price drop saying it was launched in a period of
:27:24. > :27:30.significant higher food costs and the claims intended to help combat
:27:30. > :27:35.inflation not eliminate it. All four said they worked hard to give
:27:35. > :27:42.great scrawl and pointed to research saying promotional
:27:42. > :27:48.campaigns had contributed to a fall in inflation. The march of the Big
:27:48. > :27:54.Four supermarkets continues. They control 68% of the grocery market.
:27:54. > :28:01.Consumer laws are there to make sure they play fair with customers.
:28:01. > :28:08.Are the laws used. Supermarkets in Britain have benefitted from a
:28:08. > :28:15.light regulatory touch. It is time that the regulatory government got
:28:15. > :28:19.tough with the supermarkets. And said we won't have you misleading
:28:19. > :28:25.people with price. People are really anxious about the mounting
:28:25. > :28:31.costs of the grocery bills. In the last months the Big Four have
:28:31. > :28:37.opened more than 200 stores. Is misleading information the price we