Let's hope Asda's ticking off ends the pricing charade

The Competition and Markets Authority (CMA) has asked the supermarkets to review promotions following a super-complaint by Which? accusing supermarkets of ripping off consumers with misleading and confusing prices.

Leeds-based Asda has agreed to change price promotions such as multi-buy deals after the competition watchdog singled it out during its investigation.

Which? ​accused Asda of a number of misleading price deals including selling Hovis bread at £1 and saying it previously cost £1.20. This was despite the fact that the price before the offer started was £1 and the ​bread had not been sold at £1.20 for 116 days. It also increased the price of ​Robinsons squash to £1.49 while ​it was for sale at​ “2 for £2.50” several times during 2014, but cost £1 for most of the year.

Asda ​pledged that in future “was/now” prices will give shoppers a meaningful comparison and said all the supermarkets have had to change their promotion practices, not just Asda.

​Which? executive director Richard Lloyd said: “Asda has been found breaking the rules and now must immediately clean up their act. If retailers try to pull the wool over consumers’ eyes, they will not get away with it.”

The CMA’s executive director of enforcement, Michael Grenfell, said: “We welcome the commitment we have received from Asda as well as the engagement from other supermarkets, and expect them all to ensure that their practices are not misleading.”

​Analyst Clive Black at Shore Capital said: “That Asda has seemingly being highlighted from the pack by the CMA on misleading claims is not the sort of headline that its management or customers will wish to see.

“Asda purports to be a strong value retailer and this telling off by the regulator is clearly embarrassing as it makes the retailer look sharp.”

All of the supermarkets are on a path towards simplification, which involves lower prices and fewer price matches, coupons and promotions as they seek to re-engage with sceptical customers.

​“​For all of their sakes, let’s hope that they learn the lessons so clearly spelt out by the CMA​,​ so ending the taking of customers for a ride​,” added Mr Black.​

Sainsbury’s will be the first supermarket to discontinue multi-buy deals completely and Morrisons and Tesco have started to phase them out.​

​The question is, why did Asda ever get itself in this position?​ It has invested hundreds of millions of pounds in lowering prices and this ticking off is the last thing it needs as it tries to win customers back from discounters Aldi and Lidl.

Asda has criticised its rivals for running unsustainable promotions, such as Morrisons’ Christmas booze offer. Yes these may be big loss leaders for its rivals, but at least shoppers are getting a good deal.

Asda has insisted it will protect profits over sales, which has led to some big falls in like-for-like sales.

Asda’s chief executive Andy Clarke said: “We are consistently recognised as the UK’s lowest price, full range supermarket, offering prices that are at least 10​ per cent​ less than those of our rivals. Asda has won the Grocer 33, the most credible pricing measure in our industry, for the last 18 years and we’re pleased that the CMA has today recognised that we take pricing compliance seriously.

​“It’s important that customers know that the CMA did not make any findings against Asda and it hasn’t questioned our commitment to everyday low prices.”

​The CMA may not have made any findings against Asda, but its shoppers will decide. This is a risky position for Asda. Customers are voting with their feet.

Someone’s head needs to roll for these misleading promotions if Asda is to win customers back​ and show it is serious about serving customers rather than its US parent Wal-Mart.