PROMOTIONAL PRACTICES
Bigger pack, better value? Dominic Watkins explores whether the OFT’s new promotional practices guidelines will really change anything
Everybody loves a bargain. Whether you’re saving a pound, getting 20 per cent off or buying three for the price of two, we all love feeling like we got a good deal. It’s part of how we shop and is one of our main purchasing drivers.
I
Dominic Watkins Senior Associate in the food sector group at business law firm DWF
n recent months, there has been a lot of discussion about the pricing practices used by leading supermarkets and whether they do, in fact, save us money. Much of what has been written reflects negatively on retailers and suggests that, in some way, the
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FMCGNews.co.uk
consumer is being misled and isn’t actually getting a good deal. Following its Advertising of Prices report in 2010, the Office of Fair Trading (OFT) carried out further market research around these suggestions. It concluded that there was room for improvement, so leading supermarkets were asked to agree to two voluntary principles for promotional advertising in order to ensure customer protection. It is also rumoured that the OFT will be reviewing the Pricing Practices Guide this year as well. The principles covered pre-
printed on-pack value claims and internal reference pricing, which is more commonly known as ‘was- now’ pricing, where past selling prices are used to illustrate how the current selling price is a value offer, for example half price or reduced. The focus within the ‘was-now’ pricing guidelines lies in the artificial manipulation of a price to be able to claim a discount, stating that if the ‘now’ price is held for longer than the ‘was’ price, the ‘now’ price will be considered to be the actual price of the product. The guidelines also outline how references to selling prices should
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