Supermarket loyalty cards give genuine savings, says watchdog
Shoppers signed up to supermarket loyalty schemes can make “genuine savings”, the competition watchdog has found, but it urged consumers to shop around to secure the cheapest prices.The Competition and Markets Authority (CMA) said it had reviewed 50,000 products with loyalty price options and found 92% offered a saving against the supermarkets’ usual price.The watchdog said a year ago it would investigate the effect on consumers of the rise of loyalty card price cuts amid concerns they could limit competition and lead to price increases for shoppers not signed up to the schemes.On Wednesday, the watchdog said shoppers could make an average saving of between 17% and 25% buying loyalty-priced products at the five supermarkets examined: Tesco, Sainsbury’s, Waitrose, the Co-op and Morrisons.However, the CMA called on the supermarkets to include the wider population in the schemes, including under-18s and those who do not have smartphones.
George Lusty, the interim executive director of consumer protection at the CMA, said: “We know many people don’t trust loyalty card prices, which is why we did a deep dive to get to the bottom of whether supermarkets were treating shoppers fairly.“After analysing tens of thousands of products, we found that almost all the loyalty prices reviewed offered genuine savings against the usual price – a fact we hope reassures shoppers throughout the UK.“While these discounts are legitimate, our review has shown that loyalty prices aren’t always the cheapest option, so shopping around is still key.By checking a few shops, you can continue to stretch your hard-earned cash.”Lidl updated its app-based loyalty scheme in 2022 so that shoppers had to spend more to get the top level of discounts.
In early 2023, Tesco increased its use of discounts for members of its Clubcard scheme.Later that year, Sainsbury’s began offering special discounts for Nectar card holders and the Co-op also brought in members’ pricing on some products.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionSue Davies, at the consumer group Which?, said the CMA should continue to monitor loyalty pricing to ensure retailers stuck to the law, which demands that the “usual” price flagged by retailers has been in place recently and for at least as long as the discount.“Two-tier loyalty pricing has become a common practice across retailers.It’s therefore reassuring that the CMA has found that most of the prices it looked at across supermarkets offered genuine savings against the usual price.
“Which? has also looked at prices for thousands of products and repeatedly found examples of loyalty price offers that aren’t as good as they seem.”
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