Cost of living: Loyalty card prices mask price hikes, says Which?

Supermarkets' loyalty schemes are not the bargains they appear to be, according to a leading consumer rights group.

Which? says Sainsburys and Tesco are inflating the regular price advertised for a product so that the promotional prices offered to loyalty scheme members look like a better deal than they really are.

The supermarkets reject those claims.

Sainsbury's and Tesco said all prices have been going up due to inflation.

Which? said it had tracked pricing history in stores for six months to see whether the regular price advertised was really the standard price the items were sold at over a reasonable period.

It found that around a third (29%) of the member-only promotions were at their so-called regular price for less than half of the six-month period.

Both Sainsbury's and Tesco said Which? had failed to take inflation into account when analysing prices, and stressed that they adhered to Trading Standards rules on promotions.

Inflation has been at its highest for decades in recent months, with food prices hitting record levels.

The findings are part of the watchdog's investigation into the increasingly widespread use of loyalty card schemes across supermarkets, which only allow access to the lower tier of pricing to customers who are signed up to the schemes.

Among the deals of concern to Which? was a jar of Nescafe Gold Blend Instant Coffee (200g) advertised at Sainsbury's for £6 with a Nectar card - a saving of £2.10 on the regular price of £8.10.

However, the regular price had also been £6 at Sainsbury's until it went up to £8.10 just two days before the Nectar price launched, Which? said.

Sainsbury's disputes this, saying it is an example of Which?'s "flawed" methodology as the claim that the 'regular' price was £6 is untrue.

"The base price of this item has been £8.10 since December 2022 and £6 was a promotional price throughout this year, including on Nectar Prices when it launched in April," a spokesperson for Sainsbury's said.

In another example, Which? found Heinz Salad Cream (605g) at Tesco with a Clubcard price of £3.50 and a regular price of £3.90, even though its regular price had been £2.99 for several weeks before it was increased to £3.90 - just 22 days before the Clubcard promotion.

Which? found the condiment had been at its regular price for just 14% of the previous six months.

Which? said it had shared its findings with the Competition and Markets Authority (CMA) and asked it to look at whether supermarkets could be hiking their regular prices to make loyalty scheme customers feel they are getting a discount.

A CMA spokesperson said: "Grocery prices are a huge concern to people all over the country and shoppers need help to spot the best value for their money. That's why the CMA has a programme of work in the groceries sector such as looking into unit pricing practices online and instore.

We will consider the information provided by Which? about its recent investigation into loyalty prices."