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5 August 2020

Supermarket “specials” risk misleading shoppers

Our survey finds some specials aren’t as “special” as supermarkets would like us to believe.

Consumer NZ’s latest supermarket survey found products can be on “special” so often shoppers risk being misled about the savings they’re getting.

Consumer NZ chief executive Jon Duffy said price promotions had become so common that shoppers had good grounds to question whether the discounts were real.

In this year’s survey, Consumer NZ tracked online prices for a basket of 22 grocery items for 12 weeks at Countdown, New World and Pak’nSave stores in Auckland and Wellington.

“Many of the items we tracked were routinely discounted. While genuine price promotions are good for consumers, we found specials aren’t always as ‘special’ as supermarkets would like us to believe,” he said.

At Pak’nSave, the majority of the 22 products that Consumer NZ tracked were on special six or more times. At New World, half the items were on special on six or more occasions.

Countdown’s specials varied: anywhere from two to 10 items were on special each week.

Mr Duffy said when the price of a product is regularly reduced, the special price is really its usual selling price.

At New World, Vogel’s, Ploughman’s Bakery and Nature’s Fresh loaves were on special 11 out of 12 weeks. At Pak’nSave Lower Hutt, Nature’s Fresh bread had an “extra-low” price of $2.99 for all 12 weeks.

Stores enticing customers with price promotions must be offering a genuine deal. Otherwise, they’ll mislead consumers and breach the Fair Trading Act.

Consumer NZ wants the Commerce Commission to use its market study powers to investigate the supermarket industry.

Mr Duffy said supermarkets use a confusing array of terms in their price promotions, which makes it harder for shoppers to gauge whether they’re getting a genuine discount.

“New Zealand has one of the most concentrated supermarket industries in the world, with two big chains dominating the market. That degree of concentration brings with it the risk consumers will end up paying higher prices,” Mr Duffy said.

Despite the high degree of market concentration, the supermarket sector had failed to attract much scrutiny. Mr Duffy said it’s time for that to change.

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Can you help?

Have you been misled by a less than “special” supermarket deal? Have you noticed routinely discounted items being advertised as “special” offers? Have you got examples of confusing pricing from your local supermarket?

Let us know. Support our campaign for fair supermarket prices by sending your examples to info@consumer.org.nz.

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Norbert H.
09 Aug 2020
High food prices due to lack of competition

There is a severe lack of competition on the food market in NZ. Only two supermarket chains are dictating the prices consumers have to pay.

Judith B.
09 Aug 2020

None of this is a surprise. The sooner we get Aldi ( or some real competition) the better.

08 Aug 2020

Last year my daughter was looking at snack bars and saw a brightly coloured label advertising a brand new flavoured bar at a "very special introductory price". She looked at the label underneath on which the "usual" price was exactly the same. She complained to the service desk for misleading advertising but was told that it was perfectly acceptable.

Nigel C.
08 Aug 2020
Supermarkets - Routinely Discounted Items

My wife and I don't quite get the logic behind this complaint. It seems to be saying that short-term discounting is OK but long-term discounting is not. Surely the hope is that any discount is genuine regardless of the term. At least a sign saying "Everyday Low Price" is plain English. All it suggests is that the product is either a loss leader or at least has a low markup. The only question arising is whether the claim is truthful. We are not at all confused about the message that a sign of this ilk is sending. It is easy enough to compare the cost per unit with other brands or check out prices at other supermarkets. Disclaimer Note: I have worked for a spice and beverage manufacture but neither of us has ever worked at or had any close association with a food retailer.

Neil A.
08 Aug 2020
Supermarkets - Routinely Discounted Items

Hi Nigel C, re your comment: "It is easy enough to compare the cost per unit with other brands or check out prices at other supermarkets. "

hmmm... let's see, if there say 1,000 different products in Supermarket A and the same at Supermarket B; would the average consumer (which the sellers aim at) be able to keep a track of all the prices of them all at each one and be able to compare them and then say " no - I'll go to B (or A) for the better price of X bread today? I think not.

How many shoppers do you see checking the cost per unit? I seem to be the only person in the aisles peering at those tiny labels showing the cost per unit.

The complaint is centered on consistently sticking "special" or "extra low price" stickers on products which should sell at that price anyway. ie the price is normal , not "special".

Our two supermarket owners know (in spades!) that the general punter is easily bamboozled with red or yellow stickers on labels advertising special/extra low etc. when the price is normal.

Countdown do this routinely marking their packs of meat with a SPECIAL label when the price is not 'special' at all.

Caveat emptor.

Previous member
08 Aug 2020
Is this such a big deal?

Surely a better point to make would be the use of aisle end displays to promote discounts that aren't always as good as they seem? Usually when these displays offer deals, going to the product in its regular aisle location will show better savings on similar products.

The 'everyday low price' type signage is usually different enough from less regular specials to be clear which is which. And, when truly buying on price, the real bargains are the econo brands near the top and bottom of each shelf.