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CMA Study: Most UK Supermarket Loyalty Discounts Are Legitimate

By  |  November 27, 2024

Supermarket loyalty programs are delivering genuine savings for customers, according to a report from the Competition and Markets Authority (CMA). The findings come after an extensive investigation into concerns about potential price manipulation, a review prompted by complaints from consumer advocacy group Which?.

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    The CMA examined 50,000 products sold under loyalty pricing schemes and found that 92% genuinely offered savings compared to their regular prices. This conclusion counters widespread consumer skepticism, as the regulator noted that 55% of shoppers believed that “usual” prices were artificially inflated to make loyalty deals seem more attractive.

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    According to SkyNews, the watchdog found “very little evidence” to support the notion that supermarkets were inflating regular prices to exaggerate the appeal of loyalty discounts. However, the CMA did recommend that retailers improve accessibility to these schemes, ensuring they are more inclusive for all shoppers.

    Read more: UK Watchdog Clears Spreadex Sale of Sporting Index Amid Monopoly Fears

    The investigation was sparked by claims from Which? that certain supermarket promotions were not as beneficial as advertised. Retailers, however, challenged Which?’s assertions, arguing that its analysis failed to account for the impact of inflation on pricing strategies.

    The CMA’s report comes as the holiday season approaches—a time when supermarkets typically engage in fierce competition for market share by offering substantial discounts. Yet, the report also acknowledges the challenges posed by rising operational costs, which could limit the extent of consumer savings this year.

    With households facing tight budgets and retailers under pressure to protect profit margins, loyalty schemes may continue to play a pivotal role in offering shoppers some financial relief during the festive season.

    Source: SkyNews