Five furniture and carpet retailers have changed their pricing practices following an investigation into the way discounts are advertised.
The Office of Fair Trading (OFT) said it has closed its investigation after SCS, Carpetright, Dreams, Furniture Village and Homestyle Operations’ trading brands of Harveys and Bensons for Beds confirmed their commitment to using genuine prices.
The inquiry looked into the reference prices used by retailers to advertise a bargain to shoppers, such as “Was £800, Now Half Price £400”.
The OFT said the retailers confirmed their commitment to using genuine reference prices and, without any admission of liability, made changes to their reference pricing practices.
The regulator did not give specific examples but said the higher price was unlikely to be genuine or fair if a product is only available to buy at a higher price in a limited number of stores, the discounted price is used for significantly longer than the higher price or if relatively low volumes of a product are sold at the higher price.
OFT director Gaucho Rasmussen said: “Retailers advertise bargains and discounts by referring to a previous or future higher price.
“It’s a powerful marketing tool which, when used properly, provides a helpful and easy way to demonstrate to shoppers the value of discounts and savings.”
Alex Chisholm, the chief executive of the Competition and Markets Authority (CMA), which succeeds the OFT on April 1, said:
“The CMA will monitor pricing practices within this sector to check whether businesses are complying with their legal obligations.
“Companies are advised to satisfy themselves that their practices are in line with the law because failure to do so could risk enforcement action.”
From next month, the CMA will become the UK’s leading competition and consumer body.
Commenting on the OFT’s decision Lord Harris, executive chairman at Carpetright, said:
“Today’s announcement confirms that the OFT is completely satisfied that Carpetright is in full compliance in relation to the issues that it was investigating, and it has therefore closed its investigation into Carpetright.
“We are pleased the OFT has publicly welcomed Carpetright’s commitment to open and transparent pricing. When customers visit Carpetright they can be confident of getting good quality products at a competitive price, which is supported by our price promise.”
Carpetright employs around 200 staff at its 48 stores in Yorkshire and the Humber.
Eamon Wynne, commercial director at Furniture Village, which has a store near Leeds, said: “The OFT is satisfied that Furniture Village’s pricing policies are fully compliant with all relevant consumer legislation and has, as a result, closed its enquiries.
“Furniture Village remains supportive of all initiatives which ensure that, across the entire retail sector, pricing policies and practices are fair, accurate and transparent.”
A spokesman for SCS, which has stores at locations including Leeds, Bradford, Wakefield, Huddersfield and Barnsley, said: “We appreciate the OFT’s recognition of our ongoing commitment to genuine retail prices.”
Harveys and Bensons for Beds have stores across Yorkshire, including outlets in Bradford, Wakefield, Hull and York.
The organisation that campaigns on behalf of British consumers has welcomed the OFT’s investigation into the pricing practices of carpet and furniture retailers.
Which? executive director Richard Lloyd, said yesterday: “We hope this announcement sets an example and leads to more retailers being fair to their customers by making special offers special.”