Recent findings from the UK’s Competition and Markets Authority (CMA) highlight that while supermarket loyalty pricing schemes are largely transparent, shoppers should still be savvy about their choices.
What is supermarket loyalty pricing?
Supermarket loyalty pricing sees retailers offer exclusive discounts or rewards to customers who sign up for their loyalty schemes. These programmes, such as Tesco Clubcard, Sainsbury’s Nectar, and Boots Advantage Card, are designed to incentivise repeat shopping by offering personalised deals, point systems, or lower prices on select items.
These schemes have become a staple of UK shopping, but are the savings always as good as they seem? The short answer is yes – most loyalty offers provide genuine savings. But it pays to look closer.
Investigation into supermarket loyalty pricing
The UK’s Competition and Markets Authority (CMA) recently investigated supermarket loyalty pricing schemes to determine whether they provide genuine value for shoppers.
Key findings
Looking at 50,000 loyalty-priced products from Tesco, Sainsbury’s, Waitrose, Co-op and Morrisons, the CMA discovered that:
- Most loyalty offers (92%) are genuine and transparent – offering a real saving against the ‘usual’ price in the same store.
- People can make an average saving of 17-25% buying loyalty priced products in the five supermarkets.
Nevertheless, there is room for improvement, not least because:
- 55% of people think ‘usual’ prices are upped to make loyalty deals more appealing – highlighting a lack of trust.
- 43% think loyalty scheme prices are unfair for those who are not members.
- Loyalty pricing could see a “discounted” price that is still higher than alternatives elsewhere.
“While these discounts are legitimate, our review has shown that loyalty prices aren’t always the cheapest option, so shopping around is still key. By checking a few shops, you can continue to stretch your hard-earned cash.”
UK’s Competition and Markets Authority (CMA)
Why transparency matters
Clear pricing helps shoppers make informed choices. Supermarkets have a responsibility to ensure their loyalty programmes are not misleading. Without transparency, customers may unknowingly spend more while believing they’re saving money.
The good news is that, according to the CMA:
“After analysing tens of thousands of products, we found that almost all the loyalty prices reviewed offered genuine savings against the usual price – a fact we hope reassures shoppers throughout the UK.”
But loyalty doesn’t always mean savings. Sometimes, loyalty pricing can disguise inflated base prices or encourage unnecessary purchases. So, shopping around remains a good idea.
Tips for consumers
- Compare prices: Don’t assume loyalty pricing is the cheapest option. Use price comparison apps or check competitors before committing.
- Know your spending habits: Only buy what you need, even if there’s a discount. A deal is only valuable if it’s for something you’d buy anyway.
- Understand points systems: Some schemes offer points, but always check their actual value. For example, 500 points might sound impressive but might only translate to £2.50.
- Read the small print: Loyalty offers sometimes have conditions, like minimum spend requirements or time-limited availability.
- Track your savings: Keep an eye on how much you genuinely save through loyalty programmes versus regular prices.
By staying informed, you’ll avoid falling into the trap of “illusory discounts.”
Stay informed
Want more consumer insights? Sign up for our newsletter and stay informed about the latest retail trends and investigations!
