comparison being made? Is there any reasonable expectation that consumers would purchase the product at the higher price? It may be more difficult for a retailer to argue that a price promotion is fair and not misleading if:
1. the higher price referred to in the price promotion is not a realistic selling price for the product; or
2. the retailer has been unable to sell a significant number of units of the product at that higher price.
Consequences of non-compliance
Failure to comply with price promotion requirements can result in the Advertising Standards Authority (ASA) making an adverse ruling against a retailer. Negative publicity is one of the most notable consequences that flows from an adverse ruling being made, as these rulings are published on the ASA’s website.
J Rosée Fine Jewellery is one example of a retailer that has been subject to an adverse ruling by the ASA in relation to price referencing promotions. This retailer ran a promotion for a necklace that stated “Price: £129.87. Sale: £17.87. You Save: £112.00 (86%)”. The ASA decided that this promotion was misleading as the necklace had not been on sale for more than £25 within the past 12 months.
In some instances, retailers could also face civil enforcement action or even criminal prosecution. For example, Signet Trading Limited, the owner of jewellers, H. Samuel, was fined £60,000 for running a promotion in which it was not declared that there had been an intervening price that was lower than the prior price stated on the promotion. The promotional price also ran for longer than the item was originally available at full price. Officers’ Club was also prosecuted for making savings claims in relation to a range of shirts sold in its stores when the higher reference price had only been applied in a couple of stores and to a limited range of shirts. Promotions do not stop at the price either. In early February 2023, Gymshark become the latest fashion retailer to come under fire for
misleading promotional practices when its advertised express delivery offering was ruled misleading by the ASA.
Takeaway points Fashion retailers should ensure that any savings or discount claims made are genuine, and that price promotions are, as a general rule, fair, clear and not misleading. Retailers with multiple branches or outlet stores should be conscious of not misleading customers by referring to higher prices in stores where that higher price has not been charged. When making comparisons to a RRP, retailers should clearly and prominently tell consum-ers that the higher price is a RRP rather than a price that they have charged in store.
And finally
Fashion retailers should not feel singled out in respect of these requirements relating to price promotions. The Competition and Markets Authority (CMA) recently announced that it will be considering pricing practices in the retail grocery industry to ensure that prices are clearly and fairly displayed.
In light of the CMA’s focus on consumer protection amid the cost-of- living crisis, we expect the fairness and transparency of price promotions in many industries to come under increasing scrutiny in the year to come.
Stephen Sidkin is a partner and Tayler Sani a trainee solicitor at Fox Williams LLP (
www.fashionlaw.co.uk;
www.foxwilliams.com)
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