Price marking concerns in all grocery retailers examined, Competition and Markets Authority says

Some shops are failing to display prices as clearly as they should, the consumer watchdog has warned.

The Competition and Markets Authority said this could be preventing shoppers from being able to compare prices.

However, it said evidence suggests historically high food price inflation has not been driven by weak retail competition and rising costs have not been passed on in full to shoppers.

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The CMA had accused supermarkets of increasing their margins on fuel.

But not all consumers are able to benefit from “strong” competition. In particular, people who cannot travel to large stores or shop online may rely on higher-priced convenience stores, the authority said.

The CMA has written to shops who are failing to make pricing clear – and warned them to make necessary changes or risk facing enforcement action.

It has also asked the government to reform pricing legislation to help shoppers spot the best deals.

Pricing rules themselves came in for criticism from the regulator.

The laws “leave too much scope for interpretation”, the CMA said and allow “unhelpful inconsistencies” in retailers’ practices. Price comparison may be harder for shoppers as a result, it said.

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Concerns with price marking were identified in all the 11 supermarkets and seven variety shops the CMA reviewed. Some compliance issues were “relatively minor” but were overall worse in variety retailers, such as corner shops.

Different measurements are being used for similar types of products, making it hard for customers to compare like-for-like deals, the CMA said.

Tea bags were used as an example by the regulator. They are sometimes priced per 100g, while others brands were unit priced per tea bag.

Consumers sometimes had difficulty reading small text on shelves or labels as they were obscured by shop fittings or promotional literature, the watchdog added.

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Food shops were cleared of profiteering or greedflation by the CMA.

Operating profits in the grocery sector fell by 41.5% in 2022 to 2023, while average margin outlets made on sales fell from 3.2% to 1.8% as costs increased faster than revenue.

“Rising costs have not been passed on in full to consumers,” the regulator said.

As the rate of price rises slows, the CMA said there are signs grocery retailers plan to rebuilding their profit margins.

The authority will monitor this carefully in the coming months to ensure people benefit from competitive prices as costs fall.

Chancellor Jeremy Hunt welcomed the CMA’s work.

“It’s reassuring that competition between supermarkets is working, but the CMA has my backing to look further into price rises for 10 everyday essentials,” he said.

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