The OFT (Office of Fair Trading) recently announced it’s findings from an investigation into supermarket pricing. It revealed some points that strike a rather similar chord to our own industry:

  • Product is sold at an inflated price for a limited period at low volume in just a few stores, then rolled out across all stores at the lower price – known as “yo-yo pricing”
  • The “discount” price period lasts much longer than the original higher price period, making the discount price really the normal selling price
  • Charging one price in store A, a lower price in store B, then saying “was £x, now £y” when the higher price was never actually charged in store B
  • Saying a product price has been reduced without mentioning that this is only because the package size has shrunk
  • Buy One Get One Free deals where the same volume of the same product can be bought more cheaply in a larger pack

The one that really stands out for me is the one where it says supermarkets artificially raised prices just for them to be lowered again and be called discounts! And those discount prices being applied for longer than the artificially raised ones! If the OFT ever did an investigation into our industry they would hit a goldmine of confusing pricing structures, false discounts and ‘sale’ prices! In fact I was half tempted to list all the companies I know round my end that do this, but I decided against it – for fear of more nasty comments that I would have to turn into funny computer voices!

I sat down in front of the TV and listening to that report was music to my ears. The OFT is finally waking up to the fact that companies always have raised prices to bring them back down and call it discounted! Did they really think that companies were really volunteering their money away for the greater good of the consumer? No, they weren’t. And it’s the same in this industry. It’s as crooked as they come.

Personally I would welcome an investigation into our own pricing practices. It might put a bit of pressure on the ones that operate these false discount structures to trade a bit more fairly and honestly. Maybe then the industry might be able to shake off properly this rag tag, cowboy image that small percentage of companies have managed to tar the whole industry with.

In total, 8 supermarkets have agreed ‘voluntarily’ to a new price code which is aimed to stop such practices and for their pricing to be much more fair and honest to the consumer. Maybe it will help those big businesses get back on a better footing with the public. Big business has taken a bit of a battering over the last few years when it has come to it’s relationship with it’s customer. Maybe this will be the start of a process where trust is re-built? I know our industry could certainly do with some of that!