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24 January 2024

Commerce Commission investigates problematic supermarket pricing following Consumer NZ complaint

Woolworths, Foodstuffs North Island and Foodstuffs South Island are being investigated for false and misleading shelf pricing after we laid a complaint with the Commerce Commission. The Commission will focus on whether pricing and promotional practices comply with the Fair Trading Act.

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The public sent over 600 “dodgy” pricing examples to us during a 9-month campaign ending in June 2023. Among the countless examples were:

  • “specials” that cost more than the regular price
  • multibuy deals where products would have been cheaper to buy individually
  • loyalty card pricing displayed as the default
  • shelf pricing that didn’t match the price at checkout.

We lodged the complaint with the Commission in July 2023.

"We're pleased that the Commission is investigating the false and misleading shelf pricing because shoppers should be able to go into a supermarket and trust the pricing they see. We believe this is a result of supermarkets underinvesting in technology, leading to problematic pricing issues. That is simply not good enough, and pricing accuracy should not be optional," said Gemma Rasmussen, head of research and advocacy at Consumer.

"We'd like to thank the public for being our eyes and ears and providing a mountain of evidence that pricing at the supermarkets is simply not up to scratch."

In 2020, Pak'nSave Mangere, in Auckland, was fined $78,000 for false and misleading shelf pricing where the shelf pricing did not match till pricing; we consider this fine to be inadequate, given it evidently didn’t act as a deterrent for dodgy pricing.

"Supermarkets are multi-million dollar businesses. This investigation should be a warning to the duopoly to clean up their pricing. The courts need to treat this with the gravity it deserves and back the work of both Consumer and the Commerce Commission."

"To date, we have seen a lack of meaningful action from the major supermarkets despite directly providing pricing evidence and pausing our campaign in a bid to give them time to address systemic pricing issues."

Our Sentiment Tracker found that food continues to be the second highest financial concern after housing, with many households struggling with the cost of groceries.

"Heading to the supermarket can be a stressful experience given the high cost of food. Many shoppers struggle to navigate confusing promotional pricing and determine whether something is a genuinely good deal. That shouldn't be the case."

Both major supermarkets provided commentary to the media in relation to the announcement of the pricing investigation by the Commission.

Woolworths said, "The Commerce Commission has contacted us regarding the pricing complaints it has received since September 2022. We will co-operate fully but it is not appropriate for us to comment further.”

A Foodstuffs spokesperson said, “We take pricing and promotion accuracy and integrity very seriously every day.”

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End dodgy 'specials' at the supermarkets

We have been looking into loyalty pricing – we don’t think loyalty schemes always offer the most competitive price. If you see any examples of products with a big difference between member and non-member pricing please share it with us.

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