It’s a little over two years since the UK’s competition watchdog, after investigating “tens of thousands” of supermarket loyalty prices, declared UK supermarkets were officially not guilty of ripping off British consumers.

Contrary to the claims of several cross-party politicians, consumer groups such as Which? and countless newspaper columnists, the Competition & Markets Authority (CMA) declared shoppers were actually getting genuine savings, not fake mark-ups and dodgy deals. There was, it said, “negligible” proof that retailers were manipulating prices to make loyalty card offers seem better than they really were. Rip-off Britain, it seemed, was not such a rip-off after all.

But surprise, surprise: a change of prime minister, another pledge to tackle the cost of living crisis, and we find ourselves visiting the same ground all over again. Like grocery’s very own version of Groundhog Day, the loyalty pricing debate is back.

New Chancellor John Healey fired the starting gun via a column in The Telegraph, where he said he would combat “price-gouging” and keep a close eye on signs that shoppers were being ripped off by retailers.

Within days Andy Burnham had joined in, using his UK cost of living tour to promise action on supermarket pricing as well as a consultation on the legitimacy of retail promotions.

“If something is advertised as half price, it should actually be half price,” he declared in The Guardian.

“We’ll make sure that when families snatch a deal, they can be confident they’re actually saving. That’s the least they deserve when budgets are so tight.”

Loyalty ≠ value

Over the weekend a witness for the prosecution stepped forward, none other than Aldi CEO Giles Hurley. Writing for the Mail’s This is Money website, he argued the CMA’s findings only told “part of the story” about the pricing behaviour of the full-range supermarkets.

The Aldi boss, who – perhaps coincidentally – is due to present the discounter’s next set of financial results in just a few weeks’ time, contrasted Aldi’s investments in everyday low pricing with what he claimed were over-egged claims by the likes of Tesco and Sainsbury’s on the value provided by their loyalty cards.

Arguing that Burnham was right to step in and investigate ‘fake’ prices, he said the debate about misleading discounts should “go further than checking whether a crossed-out price once appeared on a shelf”.

“There is an important distinction here,” he said. “The Competition & Markets Authority found in 2024 that 92% of the loyalty-priced products it examined offered a genuine reduction against that supermarket’s usual price.”

But he also clarified that while a discount can be genuine, “the final price can still be expensive. A loyalty badge is not proof that shoppers are getting the best value.”

Hurley stopped short of suggesting the CMA reopen its investigation, but called for the government’s promised probe to be “rigorous and targeted” in tracking down wrongdoers.

An old can of worms

It’s hard to see how any new government examination could be considered thorough without reopening that old can of worms by ordering another full probe by the CMA. Given the last investigation was described by industry sources as a “phenomenal waste of government millions”, such a move would appear to be at odds with a policy designed to save the taxpayer money.

The danger, ironically, is that all the PM and his Chancellor have achieved (apart from handing Aldi a glorious piece of free PR) is to set consumer expectations of intervention far beyond what it can actually deliver.

The smart money says this will turn out to be little more than sabre-rattling. But if the UK government is serious about intervention, perhaps it will look to take a leaf out of Scotland’s book?

Following its victory in the 7 May Holyrood election, the SNP government pledged to publish draft legislative proposals within the first 100 days of the new parliament, outlining plans to cap the price of staple foods such as bread, milk and eggs as part of its response to cost of living pressures.

With that deadline fast approaching, we do not have a long wait to see what that intervention could look like. Burnham may then be able to decide for himself if a policy referred to by some as a throwback to the 1970s (and described by various supermarket bosses as “idiotic” and “crazy”) really is the way forward.

After all, that is exactly the reaction Westminster gave Burnham’s predecessor Keir Starmer when he touted a similar intervention. The proposal was dropped faster than Amy Hunt can sprint the 100 metres.

But if price caps do become a reality, perhaps in the future we won’t be talking about Aldi Price Match, but Aldi Price Caps. It has a nice ring to it, and we could probably save the CMA a great deal of time and money while we’re at it.

Topics