Imagine walking into your favourite supermarket, loyalty card in hand, and knowing that the discounts you’re getting are not just a marketing gimmick but a genuine way to save money. Thanks to the Competition and Markets Authority (CMA)'s recent investigation, you can now shop with confidence, knowing that your loyalty is being rewarded with real savings over 90% of the time! 

The CMA has now concluded an investigation into the pricing practices of several UK supermarkets, specifically focusing on loyalty schemes and their impact on consumer savings. The investigation aimed to determine whether these loyalty prices genuinely offer savings to consumers or if they are misleading.

Key Findings:

  • Genuine Savings: The CMA found that the loyalty prices offered by supermarkets do indeed provide genuine savings to consumers. This conclusion was based on a thorough analysis of pricing data and consumer behaviour.
  • Transparency: The investigation highlighted the importance of transparency in pricing. Supermarkets were found to be generally clear about the terms and conditions of their loyalty schemes, ensuring that consumers are well-informed about the benefits.
  • Consumer Trust: The findings are likely to bolster consumer trust in supermarket loyalty schemes, as the CMA's endorsement serves as a reassurance that these programs are beneficial and not deceptive.

The proof is in the discounted pudding

The CMA's investigation found that:  

  • almost all products scrutinised – 92% of around 50,000 items – offered a genuine saving against the ‘usual’ price in the same store 
  • while loyalty prices are generally some of the cheapest available, this wasn’t always the case meaning it’s worth shopping around 
  • people can make an average saving of 17-25% buying loyalty priced products at the 5 supermarkets examined: Tesco, Sainsbury’s, Waitrose, Co-op and Morrisons 
  • 76% of shoppers say loyalty pricing has not changed where they shop, but 24% now compare prices more due to the introduction of loyalty pricing 
  • 55% of those surveyed think the price for non-members is inflated during loyalty price promotions 
  • 43% of those surveyed think it is unfair that loyalty scheme members pay lower prices for some products than those without a membership 
  • people’s concerns about how their personal data is used is not stopping them from joining a loyalty scheme – only 7% of those surveyed said they hadn’t signed up to a scheme due to personal data concerns  

With the CMA's endorsement, supermarkets with robust loyalty programs may gain a competitive edge over those without such schemes. Supermarkets can leverage the CMA's findings to promote their loyalty schemes, emphasising the genuine savings they offer. 

It will be important that supermarkets and other businesses offering loyalty discounts should ensure they use a genuine usual selling price as a benchmark.

The CMA did sound one small note of caution which is that one might still find bigger savings elsewhere at any given time, but they were satisfied that these industry practices were not fundamentally misleading or unfair. Also, they said that some supermarkets could do more to make sure that certain shoppers – such as those without smart phones and the elderly – are able to join and make use of loyalty schemes  

However, overall this is an unexpected win-win situation for both consumers and supermarkets, fostering trust and encouraging continued loyalty.