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Supermarket price war, don't you believe it. Perhaps it makes the | :00:16. | :00:21. | |
shopping experience more exciting. It doesn't necessarily make it | :00:21. | :00:27. | |
cheaper. Confusing claims. Misleading ads. I believe what they | :00:27. | :00:34. | |
tell me on the packet, wrongly. think they find ways of making you | :00:34. | :00:42. | |
spend more. Deals that save you nothing I admire the brazen nerve | :00:42. | :00:50. | |
to present something as a great deal when in fact it has gone up in | :00:50. | :00:56. | |
price. Everywhere you look there are special offers. And Panorama | :00:56. | :01:01. | |
sees how some of the biggest names stand accused of breaking the law. | :01:01. | :01:05. | |
There's a potential for prosecutions to be brought against | :01:05. | :01:15. | |
:01:15. | :01:41. | ||
8 0sthou thousand -- 80,000 square feet, 40,000 product lines. Opening | :01:41. | :01:48. | |
day at Tesco's brand new super store in Sheffield. This launch | :01:48. | :01:53. | |
comes as household budgets are under increasing pressure and amid | :01:53. | :02:01. | |
a ferocious PR war in which the Big Four compete for the title of UK's | :02:01. | :02:05. | |
cheapest. Sainsbury's offers to refund the difference on branded | :02:05. | :02:15. | |
:02:15. | :02:17. | ||
goods if they can be found cheaper elsewhere. Moirzens promotes its | :02:17. | :02:25. | |
pris crunch campaign while ASDA offers to sell goods 10% cheaper | :02:25. | :02:32. | |
than the rivals. Tesco pledges to cut the cost of thousands. It was | :02:32. | :02:39. | |
quite a few bargains. We have not - - you got your washing powder. | :02:39. | :02:46. | |
I got was a special offer on ketchup. You can't turn your nose | :02:47. | :02:51. | |
up on it. Good deals according to some customers. Cut throat | :02:51. | :02:55. | |
competition according to the headlines. In which price war is | :02:55. | :03:00. | |
truth the first casualties? there was a price war going on at | :03:00. | :03:05. | |
the moment we would see profits falling or see severe warnings. | :03:05. | :03:10. | |
That's not happening. What we're seeing is more about using the | :03:10. | :03:15. | |
marketing budget as effectively as you can. The name of the game is to | :03:15. | :03:20. | |
be as clever as possible how you promote and use your discount and | :03:20. | :03:26. | |
adrabgt your customers. If the latest promotions really are about | :03:26. | :03:30. | |
marketing and the supermarkets profits are unaffected, what is the | :03:31. | :03:39. | |
reality behind the savings? Tonight we will find out, we'll study | :03:39. | :03:43. | |
supermarket promotions in detail and reveal the hidden catches and | :03:43. | :03:49. | |
ask the hidden giepbs are -- giants are breaking the promises or the | :03:49. | :03:58. | |
laws to designed to protect us, the consumer. Michael and Beatrice Bond | :03:58. | :04:06. | |
do their regular big shop at Tesco. Week by week their trolley of items | :04:06. | :04:15. | |
hardly changes. I would think we spend between �6013 -- and �70 a | :04:15. | :04:23. | |
week. -- 60... We figured our prices would come down. Most of the | :04:23. | :04:30. | |
items are basic items. Tesco's price campaign started at the end | :04:30. | :04:35. | |
of September. At Tesco we're dropping the price of 3,000 items. | :04:35. | :04:43. | |
As customers like the Bonds have noticed other products have been | :04:43. | :04:50. | |
going up This Creamfields cream three months ago it was 65 pence, | :04:51. | :05:00. | |
:05:01. | :05:02. | ||
and now 68 pence. And this was 87 before and 94 now. The unsalted | :05:02. | :05:09. | |
butter they are saying is �1.10 a pack. We have a receipt back from | :05:09. | :05:18. | |
April, and the unsalted butter is 98p. This has gone up 12p a pack. | :05:18. | :05:24. | |
They are creeping the prices up all the time. Tesco says it has spent | :05:24. | :05:29. | |
�500 million on the latest price cuts. With price rises elsewhere, | :05:29. | :05:35. | |
is it benefitting us as much as we think? We pick up things like 3,000 | :05:35. | :05:40. | |
products, you would think that sounds like I'll really benefit | :05:40. | :05:45. | |
from that. 3,000 products in the context of a modern supermarket is | :05:45. | :05:53. | |
less than 10% of all the products they stock. Tesco says as the big | :05:53. | :05:58. | |
prise Drop is focused on staples, customers can make significant | :05:58. | :06:03. | |
savings and customers are happy. It has slash the value of the Clubcard | :06:03. | :06:11. | |
loyalty scheme to fund the cuts. Customers who used to get 2 points | :06:11. | :06:16. | |
for every pound spent only get one. Supermarkets give you with one hand | :06:16. | :06:23. | |
and take away with the other. Any time you get a good deal they | :06:23. | :06:27. | |
compensate by charging something else more -- more for something | :06:27. | :06:34. | |
else. Our loyalty for Tesco is being tested. We want straight | :06:34. | :06:37. | |
pricing that is not complicated could people understand what they | :06:38. | :06:44. | |
are paying for. We're constantly having to outwit the management of | :06:44. | :06:49. | |
Tesco. Tesco deny misleading customers and say they are sorry | :06:49. | :06:58. | |
the Bonds are unhappy. Everywhere you look there are special offers. | :06:58. | :07:02. | |
You would feel something not being something on offer. Across the UK | :07:02. | :07:09. | |
lots of other shoppers are unhappy, not just about Tesco. I can't work | :07:09. | :07:13. | |
this out!. As customers we're confronted with thousands of | :07:13. | :07:19. | |
promotions every time we set foot in a super store, we're confused by | :07:19. | :07:25. | |
them and losing faith in them. my head I think it's cheaper. | :07:26. | :07:34. | |
Thinking again. In a survey for Panorama, 42% of shoppers said they | :07:34. | :07:38. | |
no longer trust supermarket discounts are genuine Sometimes you | :07:38. | :07:43. | |
-- they make deals on things that you think I don't need it, but | :07:43. | :07:48. | |
because it's a great deal, maybe I should get it. I think they're | :07:48. | :07:53. | |
finding ways of making you spend more. This view is widely shared, | :07:54. | :07:57. | |
while most people do still believe supermarket claims nearly a third | :07:57. | :08:03. | |
of those in our survey said they're less likely to do so now than in | :08:03. | :08:11. | |
the past. And 47%, almost half, said they felt mislead by various | :08:11. | :08:17. | |
offers. I've come across stuff it's a yellow tag with a price on, and I | :08:17. | :08:22. | |
thought it's an offer but it's not. You have not always the time to | :08:22. | :08:28. | |
read through which one is good and not. Everything can't be that cheap. | :08:28. | :08:33. | |
Although there's nothing wrong with supermarkets enticing us to stop | :08:33. | :08:40. | |
there, they should be honest. The Advertising Standards Authority | :08:40. | :08:47. | |
have found three of the Big Four misleading customers repeatedly. It | :08:47. | :08:52. | |
has banned ten adverts from ASDA, and 16 from Tesco. I'll show you a | :08:52. | :08:58. | |
couple of ads from newspaper, and national newspapers. The first is | :08:58. | :09:08. | |
:09:08. | :09:11. | ||
Tesco, and appeared in 2009. Last fry over 1.1 million customers were | :09:11. | :09:20. | |
cheaper at Tesco and ASDA... ASA's judgment, this was misleading. | :09:20. | :09:28. | |
Tesco did not analyse 1.8 million, it studied just 218,000. It didn't | :09:28. | :09:37. | |
compare all the products in them. think it's cheeky, when someone is | :09:37. | :09:41. | |
proclaiming something like that on television, I presume they have had | :09:41. | :09:50. | |
a proper test. The ASA later banned the ad as well as this. She grabs a | :09:50. | :10:00. | |
:10:00. | :10:09. | ||
the price guarantee did not apply to certain items. So what do you | :10:10. | :10:16. | |
make of that? A -- I'm lost for words. I don't know what to think. | :10:16. | :10:22. | |
They're pushing their luck. Seeing how far they can get away. It's | :10:23. | :10:29. | |
surprising how much and to what lengths they go to. Some ads may | :10:29. | :10:37. | |
look fine at first sight and the flaws in others are more obvious. | :10:37. | :10:42. | |
These multi-buy deals offer no savings at all but they increase | :10:42. | :10:47. | |
sales. People will look at that and think that is silly but I think it | :10:47. | :10:55. | |
would work, yes. In 2thou 9 the Office of Fair Trading asked | :10:55. | :11:02. | |
psychologist Ahmetoglu to report on how offers such as this influence | :11:02. | :11:07. | |
customer behaviour. You would think no-one would go for that. Offers | :11:07. | :11:12. | |
trigger a biological reaction. They are triggering the same reward | :11:12. | :11:17. | |
system in the brain you have when you eat chocolate. The offer will | :11:17. | :11:23. | |
attract your attention, and a lot of people won't look at the single | :11:23. | :11:28. | |
unit price. That's a simple calculation. People don't calculate. | :11:28. | :11:34. | |
They use a lot of automatic decision-making. In this case they | :11:34. | :11:40. | |
would not be conscious of the fact they're being influenced. In number | :11:40. | :11:46. | |
two they would subconsciously prime the consumer to buy a higher | :11:46. | :11:50. | |
quantity. Supermarkets say they refer to a range of products so | :11:50. | :11:55. | |
savings can be made. Others are the result of human error. And another | :11:55. | :12:05. | |
:12:05. | :12:06. | ||
kind of offer, the type that leaves me flummoxed. Look at these? It is | :12:07. | :12:13. | |
so complex. That you would simply go for the simplest offer which is | :12:13. | :12:21. | |
three for five. Marketers know the better they promote their products | :12:21. | :12:26. | |
the more they are likely to sell. That's why they have special offers. | :12:26. | :12:31. | |
That's their business. Perhaps it make the shopping experience more | :12:31. | :12:35. | |
exciting. It doesn't necessarily make it cheaper. The supermarkets | :12:35. | :12:43. | |
say they strife to offer value. One former regulator believes the | :12:43. | :12:49. | |
techniques leaves consumers baffled. It's confusing. There's the | :12:49. | :12:55. | |
illusion of value. Is that what they're -- we're about, no, we | :12:56. | :13:00. | |
should be transparent. I don't believe the consumer is being | :13:00. | :13:06. | |
intentionally mislead but the consumer is being confused. If we | :13:06. | :13:10. | |
find cases where supermarkets are outside the law, they must be | :13:10. | :13:15. | |
prosecuted. When does a merely confusing promotion become | :13:15. | :13:22. | |
potentially more serious. Let's look at ASDA and the price | :13:22. | :13:29. | |
rollbacks. An example of how all of us at ASDA are saving you machine. | :13:29. | :13:36. | |
Not always, earlier this year, ASDA was caught offering 27 items as | :13:36. | :13:41. | |
rollbacks when the prices have gone up. They apologised claiming a | :13:41. | :13:51. | |
:13:51. | :13:51. | ||
glitch in the system. Now Panorama has find problems in the deal the | :13:51. | :14:01. | |
:14:01. | :14:28. | ||
woe woe. There's items in the A good deal? Really? I'll let you | :14:28. | :14:35. | |
decide. We have since checked the prices of some of the items lifted | :14:35. | :14:43. | |
as Wow offers on ASDA's website. 11 had been on sale for the same price | :14:43. | :14:50. | |
for at least six months. No savings there. These four items, actually | :14:50. | :14:57. | |
more expensive nan they used to be. I admire the audacity of the brazen | :14:57. | :15:04. | |
nerve of the soibgz to present something as a Wow deal when it has | :15:04. | :15:14. | |
gone up in price. You have to clap. All promotions, all promotions must | :15:14. | :15:24. | |
comply with protection. Parry par advised the government on how to | :15:24. | :15:31. | |
incorporate a directive. A average consumer seeing something market as | :15:31. | :15:36. | |
Wow ko would get the impression the price has been redepuesed. If it's | :15:36. | :15:43. | |
a case the price has not been reduced it could be a breach of | :15:43. | :15:48. | |
regulation five of unfair trading regulations. Your average consumer | :15:48. | :15:53. | |
when they learned the truth that the price was not reduced and in | :15:53. | :15:56. | |
fact had been increased almost certainly would not purchase the | :15:57. | :16:02. | |
item. We have since contacted ASDA about the examples it found, it | :16:02. | :16:06. | |
told us the products should not have been advertised at Wow offers | :16:06. | :16:12. | |
and has removed them. In the so- called price war huge amounts of | :16:12. | :16:20. | |
money are at stake. Of the 96 million we spent on groceries, �65 | :16:20. | :16:28. | |
million went through the tills of the Big Four supermarkets. At -- | :16:28. | :16:34. | |
Tesco is the biggest. Using data spried by mySupermarket we have | :16:35. | :16:41. | |
been tracking a range of prices over the last months, and we have | :16:41. | :16:45. | |
found instances of price establishing. A retailer sells a | :16:45. | :16:51. | |
product for a certain price for a long period of time and suddenly | :16:51. | :16:55. | |
raises it, and shortly afterwards it drops it back down then it can | :16:55. | :17:03. | |
say it has slash the cost. It seems Tesco has been doing that as part | :17:03. | :17:09. | |
of the big price drop campaign. Supermarkets are allowed to do it, | :17:09. | :17:16. | |
as well as the price has been established for 28 days or along | :17:16. | :17:22. | |
with consumer expectation. We found xlgs of Tesco breaching the rule. | :17:22. | :17:28. | |
Take the supermarket's fresh chicken which freefps in the ads. | :17:28. | :17:35. | |
In January customers could buy them for �4 each. That remain the case | :17:35. | :17:44. | |
in February, March, April, May and June. In midJuly Tesco raised the | :17:44. | :17:50. | |
price to �5 each and in September it went back to what it had been | :17:50. | :17:55. | |
most of the year, Tesco labelled it a price drop. Are you concerned or | :17:55. | :18:01. | |
surprised by what we found. An average consumer would not expect a | :18:01. | :18:07. | |
price that had been consistent for many months suddenly to prize by �1 | :18:07. | :18:13. | |
to revert back to the -- price by �1 to revert back to be described | :18:13. | :18:18. | |
as a price drop. If it could be established that the average | :18:18. | :18:22. | |
consumer was being mislead it could lead to a criminal prosecution. | :18:22. | :18:27. | |
Tesco told us it had acted in accordance with government pricing | :18:27. | :18:34. | |
guidance. Misleading websites, questionable ads. What promotions | :18:34. | :18:40. | |
are the companies peddling in store? Time for a undercover | :18:40. | :18:47. | |
shopping trip. For soibgz in six hours. There are -- supermarkets in | :18:47. | :18:52. | |
six hours. The first thing I noticed was how they priced the | :18:52. | :18:58. | |
fruit and veg. It's confusing. are priced differently. On weight | :18:58. | :19:06. | |
here and units there. In all supermarkets the loose items were | :19:06. | :19:14. | |
priced per kilo but some packaged only gave a price per pack with no | :19:14. | :19:21. | |
weight lifted. The only way to compare was to way -- weigh the | :19:21. | :19:26. | |
pack and compare. Haven't time to do the maths really. Afterwards we | :19:26. | :19:32. | |
had time to do the maths and examine the actual price | :19:32. | :19:40. | |
differences. In Sainsbury's five bananas in a pact were �1, and | :19:40. | :19:50. | |
buying five loose were 45p. It was the same with red onions in ASDA. | :19:50. | :20:00. | |
:20:00. | :20:01. | ||
86p per kilo for loose ones but 2.85 per kilo in a net. At Tesco | :20:01. | :20:11. | |
:20:11. | :20:11. | ||
gala apples �1.66 per kilo loose. � 2.14 per kilo in a bag. At Morrisey | :20:11. | :20:20. | |
the other way around. Their Empire apples cost �1.82 a kilo in a bag. | :20:20. | :20:28. | |
A good deal more if you bought them loose. Pity I couldn't work it out | :20:28. | :20:36. | |
at the time! Despite the confusion all the supermarkets told us | :20:36. | :20:43. | |
customers like being presented with different offers like this | :20:43. | :20:48. | |
Supermarkets have been more disciplined in letting people know | :20:48. | :20:53. | |
the price per unit as well as per pack. We have to be better at | :20:53. | :21:00. | |
giving people the information they need to buy carefully and properly. | :21:00. | :21:05. | |
The way supermarkets price fruit and veg may be confusing but it is | :21:05. | :21:09. | |
allowed. What government guidance does not allow is advertising a | :21:10. | :21:17. | |
price cut without displaying the previous price. At Morriseys my | :21:17. | :21:23. | |
eyes were drawn to this -- Morrison -- my eyes were drawn to this price | :21:23. | :21:29. | |
conditioner. I wonder why the old price wasn't on the label? Perhaps | :21:29. | :21:35. | |
because it was lower than the previous. The condition may be �2 | :21:35. | :21:45. | |
now, but if I bought it two weeks before, it would have cost �1.65. | :21:45. | :21:53. | |
Morrison said it was more earlier in the year. So �2 was still good | :21:53. | :21:56. | |
value. The average consumer would be looking for a reduction. If the | :21:56. | :22:02. | |
price was cheaper than the current offer in particular in the | :22:02. | :22:06. | |
immediate past that would influence the consumer in making the decision, | :22:06. | :22:12. | |
and if they knew the truth of it, and -- they might not make the | :22:12. | :22:17. | |
purchase. I showed Parry par some of the other purchases I made. | :22:17. | :22:25. | |
Including this one. Offering me a worse deal. 75 or three or �4. | :22:25. | :22:31. | |
Offers like this can be the result of mistakes. Supermarkets say where | :22:31. | :22:35. | |
individual products work out cheaper shoppers will be charged | :22:35. | :22:42. | |
the lower price. These went through the till correctly. According to | :22:42. | :22:48. | |
the survey others don't. 35% of shoppers said they found mistakes | :22:48. | :22:53. | |
on bills with regard to promotions and discounts. If the multi-buy | :22:53. | :22:57. | |
offer doesn't go through properly at the till there's a clear | :22:57. | :23:03. | |
evidence of breach of regulations. One one expect supermarkets to | :23:03. | :23:10. | |
programme the till correctly before they put the offer on display. | :23:10. | :23:16. | |
my shopping trip I came across another promotion that breaches the | :23:16. | :23:23. | |
regulations, one all four were guilty of. This is a bigger pack | :23:23. | :23:29. | |
better value. If they got two of the smaller ones it's cheaper. The | :23:29. | :23:39. | |
:23:39. | :23:39. | ||
better value is put the big one back. At ASDA I found the tub of | :23:39. | :23:49. | |
Clover... I could buy two tubs for a total of �3. Same amount, 2p | :23:49. | :23:55. | |
cheaper. The same misleading claim with the same product was made as | :23:56. | :24:05. | |
Morrisons, here the bigger pack was �is -- �1.70 more expensive. At | :24:05. | :24:15. | |
:24:15. | :24:16. | ||
Tesco it was Vanish, but three small ones for �9, and a big one | :24:16. | :24:23. | |
for ��12. At Sainsbury's a further five examples. I can get | :24:23. | :24:32. | |
Sainsbury's own cream of tomb co- soup, �1.99 for four cans. If | :24:32. | :24:38. | |
you're eagle-eyed and work your way down the row, you can get the | :24:38. | :24:48. | |
:24:48. | :24:48. | ||
single cans, �46. Much cheaper than buying four cans packed up. It | :24:48. | :24:55. | |
isn't. The supermarkets say they offer thousands of deals. When | :24:55. | :25:00. | |
smaller packs are on promotion they may be cheaper for a short period. | :25:00. | :25:07. | |
I found 17 examples of bigger packs presented as better value when they | :25:07. | :25:13. | |
weren't. Five in Tesco, five in Sainsbury's. Four in ASDA. And | :25:13. | :25:22. | |
three in Morrisons. All these stores are within eight miles of my | :25:22. | :25:27. | |
home. How many more examples are out there. I'm normally walking | :25:27. | :25:34. | |
around here with three kids. I last thing I can do is work out what is | :25:34. | :25:41. | |
cheaper. I believe what is on the packet. The supermarkets told us | :25:41. | :25:46. | |
value labels are often put on by the manufacturers and ASDA says | :25:46. | :25:51. | |
they're working with them carefully to resolve this issue. They all | :25:51. | :25:59. | |
said they display big and small packs, so shoppers are compare them. | :25:59. | :26:05. | |
Some were genuine mistakes. The law on this area is very clear. It is | :26:05. | :26:10. | |
unlawful to make claims that are misleading or actually false and | :26:10. | :26:14. | |
that are persuading consumers to make the wrong choice. What worries | :26:14. | :26:21. | |
you the most. It is not just the occasional mishap here. There are | :26:21. | :26:25. | |
repeated examples with many, many products in different locations | :26:25. | :26:29. | |
with different supermarkets and all of them seem to be doing the same | :26:29. | :26:33. | |
thing. So there's a potential for prosecutions to be brought against | :26:33. | :26:40. | |
all of them. And it is not as much they haven't been warned that could | :26:40. | :26:45. | |
happen. A year ago this year the Office of Fair Trading told | :26:45. | :26:50. | |
retailers to clean up their products with relation to | :26:50. | :26:58. | |
misleading prices. And the OFT promised to take eneno -- | :26:58. | :27:05. | |
enforcement action. 12 months on the OFT has told Panorama they will | :27:05. | :27:12. | |
be concerned about misleading offers. Tesco defended the price | :27:12. | :27:16. | |
rises before the price drop saying it was launched in a period of | :27:16. | :27:24. | |
significant higher food costs and the claims intended to help combat | :27:24. | :27:30. | |
inflation not eliminate it. All four said they worked hard to give | :27:30. | :27:35. | |
great scrawl and pointed to research saying promotional | :27:35. | :27:42. | |
campaigns had contributed to a fall in inflation. The march of the Big | :27:42. | :27:48. | |
Four supermarkets continues. They control 68% of the grocery market. | :27:48. | :27:54. | |
Consumer laws are there to make sure they play fair with customers. | :27:54. | :28:01. | |
Are the laws used. Supermarkets in Britain have benefitted from a | :28:01. | :28:08. | |
light regulatory touch. It is time that the regulatory government got | :28:08. | :28:15. | |
tough with the supermarkets. And said we won't have you misleading | :28:15. | :28:19. | |
people with price. People are really anxious about the mounting | :28:19. | :28:25. | |
costs of the grocery bills. In the last months the Big Four have | :28:25. | :28:31. | |
opened more than 200 stores. Is misleading information the price we | :28:31. | :28:37. |