Andy Burnham has been warned to take Aldi’s attacks on ”phoney“ supermarket price promotions with a “huge pinch of salt”.
Over the weekend the discounter’s CEO Giles Hurley waded in to the row over the government’s pledge to clamp down on retailer discounts that “rip off” consumers, including deals that make discounts look bigger than they really are.
Hurley told the Mail’s This is Money site that supposedly “spectacular” savings in supermarkets such as Tesco and Sainsbury’s were leaving shoppers short-changed at the till. Loyalty card reductions still left them paying higher prices than Aldi’s everyday low pricing (EDLP) strategy, he claimed.
He said he welcomed the PM’s announcement last week, on his so-called “cost of living tour” of Britain, that he would be investigating retailers that exploited shoppers with “dodgy deals”.
“When a family sees a product advertised at half price, the starting price must mean something,” Hurley said.
“That is why prime minister Andy Burnham is right to challenge fake ‘was’ prices, invented reductions and other promotions that make a deal look better than it really is.
“Every supermarket should welcome clear rules and firm enforcement. Trust matters in retail, especially when budgets are under pressure.”
Burnham’s intervention comes after persistent claims by the likes of campaign group Which?, accusing retailers, including supermarkets, of “misleading and dodgy pricing practices”.
Meanwhile, new Chancellor John Healey has pledged to combat “price gouging” and monitor signs of shoppers being ripped off by retailers.
“A loyalty badge is not proof that shoppers are getting the best value,” wrote Hurley.
“What ultimately matters is the total at the checkout. A big discount from a high price can still leave you paying too much.”
However, Ged Futter, founder of The Retail Mind, said Burnham would be “wise not to wade in with his size nines”.
“We have had two CMA investigations that were very clear on exactly this issue,” said Futter.
“Not a single shred of evidence was found saying the customer was being conned by supermarket loyalty prices.
Futter pointed out that Hurley’s comment’s came weeks ahead of Aldi’s September results.
“We should treat this with a huge pinch of salt. When Aldi has a PR spin it tends to be in this sort of period when its results are coming up, so we will see if there is significance in what he says about Aldi spending money investing in everyday prices.
“I hope Andy Burnham is smart enough to recognise that the UK is a very competitive market and there is no need for him to do anything at all.
“I think the probability is that what we’ve been seeing is sabre-rattling and that it will not result in anything concrete.”
A supermarket source said repeated probes by the CMA had shown that claims of supermarkets exploiting shoppers with discounts were “wide of the mark”, adding that supermarket pricing, including loyalty schemes, were “super competitive”.
“This is basically a glorified Aldi press release,” said another retail source.
However, Hurley insisted that the government should intervene.
“A discount can be genuine yet still leave you paying too much overall,” he wrote.
“Families don’t pay their grocery bills one product at a time – what matters is the total at the till.
“At Aldi, we’ve always believed in starting low and making those prices available to everyone. No loyalty card. No app. No hoops to jump through.”
No comments yet