So the supermarkets are back in the news again for fiddling prices and muddling consumers.
This week, Tesco admitted that it increased the prices of about 250 products in the first part of this year before reducing them again ahead of a price promotion campaign it launched on Monday (Conor Pope, Irish Times). They wouldn’t comment on a report of about 8,000 price increases in the first two months of the year.
This is hardly breaking news. I’ve commented before on the disingenuous, often deliberately misleading tactics of supermarkets when it comes to price promotions – unashamed price inflation to create false discounts to customers – but it is encouraging to see them get caught red-handed, and to see people like MEP and food policy expert Mairéad McGuinness take them to task.
Only this week my wife complained about buying her usual bags of seeds for sprinkling on salads and the like. She’d become familiar with the 79 cent regular price point and was delighted to see a 3 for 2 offer in the supermarket in question. What she wasn’t delighted to see was the €1.19 per packet charged at the check-out – she got the 3 for 2, but at a price-point 50% higher than normal, seemingly for the purposes of the promotion in question.
Even more incredulously, when this was pointed out to a supervisor and the promotional end was inspected, the original 79 cent price tag was still on the shelf alongside the new €1.19 one, but immediately removed by the supervisor leaving just the new higher price tag. My wife was refunded to honour the 3 for 2 at the 79 cent that had been present when she made her purchase, but fumed at the deliberate attempt by the supermarket to mislead her.
How many customers had already been through the check-out without noticing the two price points? More to the point, how many people were fooled into buying the product because of this disingenuous promotion?
There are laws to protect consumers against false advertising and price promotion, but as ever the devil is in both the detail and the enforcement. With so many products, with differences in packaging, varietals and pack sizes, it’s impossible to watch all of the prices all of the time.
Tesco tried to explain away their early year price increases, saying “many were as a result of products coming off promotions in the post-Christmas period“.
Call me sceptical, or even cynical, but I’m unequivocal about this.
The 79 cent seed incident, like the countless other false promotions in our major supermarkets, is much more than creative accounting or price-tinkering. It’s a downright lie, and the companies that perpetrate them are fraudsters and cheats.
As an Irish, family-owned company with a narrow product set – all we sell is wine, after all – we have a very clear view and policy on pricing. We price honestly and fairly. We set our normal retail prices to reflect a strong price/quality ratio on every single wine we source. It is our bread and butter, and modus operandi, that we get judged on the quality of our wines at our full retail price.
We don’t yo-yo our prices to create false discounts but we do price promote. Sometimes these discounts are part-funded by our suppliers to drive volume and brand penetration, sometimes we wholly fund it ourselves for the same goal.
We use our rolling headline promotions, like the current 20% off Spain offer, to concentrate our buying for the period in question, encourage customers to try new wines from regions they wouldn’t normally go to, and to provide a strong and genuine value proposition to the consumer on every visit.
But never, ever do we inflate a price to subsequently discount it, and never, ever do we lie about prices.
The wine industry is a terrific one to be a part of. Curious Wines will be three later this year, and the signs are good. We grew by over 60% in sales between 2009 and 2010, and first quarter growth in 2011 is following a similar vein. The response from customers and support to a new entrant is heart-warming news to the independent sector (not to mention my poor wife who supported me with this crazy idea from the start).
So we’re not afraid, nor frankly too concerned at all, by any competition – it’s a healthy thing for any sector and ultimately best of all for consumers. But all we do ask is that the incumbent players, and in particular the big guys, play fair.
Is that too much to ask?
13 Comments
Hear hear.
It called playing with figures…… and lots more
I sympathise, but where did Tesco lie about prices? You say that the €1.19 price was marked on the shelf. I think it’s unlikely that the 79c one being there was deliberate — Tesco have far higher-calibre weapons in their arsenal. The law allows for mistakes like this and, in fact, there was no requirement for Tesco to give the refund. They could’ve done a Ryanair and said “€1.19, do you want them or not?”. But that would be bad for business. Admit the mistake, take slightly less of the customer’s money, and they’ll be back again.
I don’t see why a company raising its prices and then cutting them again, or raising them in order to offer a 3-for-2 should be banned, as long as its done within the law.
How exactly do you want to impose fairness here? Should a retailer not be permitted to set its own prices? Should it not be up to the consumer to decide whether that product is worth that price in that shop at that time?
There are any number of cures here which are way worse than the disease.
You’re on the ball Mike, this sort of hoodwinking is all-pervasive in big companies, smoke & mirrors to distract and confuse. One that took the biscuit recently, in supermaket again, ready meal big letters “TWO FOR €10.00” or €4.85 for one. Honest! http://twitpic.com/4faw8j. I won’t even start on the telecoms smoke & mirrors, that is only getting worse! I was able to able to cut 47% off a client’s phone just this week! Rip off Ireland is alive and well!
The reality is that they will continue to do so until they are made pay large fines for abusing customers. So the consumer rights people need to take action, if the laws exist to penalise this. If not we need some new ones!
It’s sickening to see people fleeced of their hard earned, increasingly scarce disposable income! All you can do is shop around and check receipts etc. make sure you get what you were promised!
@The Beer Nut – the law used to be that if you made a special offer on something the “higher price” you say it’s reduced from had to be in place for three months or something like that…. I feel it is underhanded to say the least for them to do what they did in this example. In fact they created a completely false discount – old price 79c three of them = €2.37 – @ the new price of €1.19 the “special offer” is actually more expensive – three for €2.38! Surely you can agree there’s something wrong there??
There is some info on this consumer connect site http://www.tinyurl.ie/3wn but not specific to this case. I really do feel they are hoodwinking customers on this one as well as many others. As you say though, people can make their own decisions on what is good value or not and are best off voting with their feet!
I see on Consumer Connect that the goods must have been at the previous price “for a reasonable time”, which isn’t very helpful. But regardless of what time-period you set, Tesco will wait one day later and then cut the jacked-up price back to slightly higher than it was before. So are we looking at setting a legal definition of “a reasonable time”? Is three months too short? Would six months be better? If we were having this conversation in July instead of March would people be happier?
And no, I don’t see anything wrong with the 3-for-2 ploy. It’s not a false discount, or any kind of discount, it’s a 3-for-2. Once again: what exactly would you have done about it? A rule that the price must be constant for a fixed period before a buy-some-get-one-free offer is applied? That’s just going to reduce the number of 3-for2s around, isn’t it? The bottom line for me is: either €2.38 is a fair price for the seeds or it isn’t. The person who should be making that decision is the consumer and no-one else.
You say it feels like hoodwinking, and I’m not denying it isn’t sharp practice. But all business and all marketing contains some level of cynical sharp practice, and companies with the clout of Tesco will always play fast-and-loose, and it’s great that the media highlight what they’re doing.
But to say that they’re lying, cheating and defrauding is unjustifiable. And to complain about their practices without presenting any alternative propositions to how these things should be regulated helps no-one.
It’s true. Every word of it
Sorry Beer Nut, I have to disagree. If a “special offer” be it 3 for 2 or whatever is actually not a discount, in fact more expensive, that to me is a false discount. In this instance the not-false way to say it is “Buy three for 1c more than you used to pay!”
But surely you recognise that “what you used to pay” is irrelevant. Are you saying that when a retailer puts a price up it should advertise the old one?
And which is better: the price of a pack of seeds going up to €1.19, or the price of a pack of seeds going up to €1.19 and a free packet if you buy two?
While The Beer Nut makes good points, I still think the summary is that Tesco (in this case) has sought to mislead shoppers, which is against the spirit of whatever laws there are, and so is worth highlighting.
Also, I’m sick of those Marty Whelan ads.
Looks like I have to reiterate that I disagree! You’re taking it very naiively or innocently I think, the price of the seeds didn’t go up per se, it was artificially inflated to fool customers into thinking they were actually getting one free if they bought two.
This sort of thing goes on all the time, I noticed another one on McCambridges in a certain supermarket, coming up to Christmas the price goes up by maybe 30c…then in the run-up to Christmas you save, let’s say 30c, if you buy McCambridges with a side of smoked salmon…. Simple customer abuse IMHO.
Thanks everyone for the spirited comments, delighted we’ve raised some great points!
I do feel there’s a debate over semantics here, rather than the underlying issue. Whether you want to call it hood-winking, sharp practice, price-tinkering or something else, I believe the intention to mislead is there.
The purpose of the post was to reiterate the message of “buyer beware” on the back of Conor Pope’s article, with a personal anecdote and viewpoint, as well as reaffirm the code of ethics Curious Wines employs in terms of its own pricing.
It was not to provide cure. That is ultimately for consumers to seek and legislators to provide.
I must also point out that the supermarket with the seed incident was not specifically named, to avoid digression of the issue. The matter was taken up with the supermarket in question.
Thanks again for all your comments.
Thanks for the clarification, Michael, apologies for misreading that it was Tesco.
But James: people aren’t being fooled into thinking they’re getting one free. They *are* getting one free. If it was 79c for one and €2.38 for three, advertised as a 3-for-2, then there’s something wrong. But the unassailable fact is that one packet of seeds, in the real world, in real time, on the actual shelf, is €1.19. If you only buy one that’s what you’ll pay. It sounds to me like you’d be happier if three packets cost €3.57: €1.19 each, no offers.
All prices, and price changes, are artificial.