Consumer NZ: The Grocery Commissioner's Response To Ongoing Supermarket Pricing Errors Leaves Shoppers Carrying The Load

Consumer is concerned that the grocery commissioner, Pierre van Heerden, has failed to address the systemic issues with major supermarkets’ pricing discrepancies and is leaving the responsibility to shoppers to police these errors.

This comes off the back of the grocery commissioner announcing he has asked the duopoly to review and better publicise their refund policies and will introduce new rules to require the supermarkets to disclose information about pricing and promotional complaints.

"Based on feedback from the public, as well as our research, it’s fair to say the supermarkets need to sort their pricing and promotional practices out. The lack of initiative and investment by the duopoly in addressing these issues is disappointing,” says Gemma Rasmussen, head of research and advocacy at Consumer.

“It’s a basic requirement that businesses display accurate prices. Shoppers are entitled to expect this at a bare minimum.”

The advocacy group has been calling out problematic pricing practices with the major supermarkets for years.

“It's great to see the Commerce Commission has recognised problematic pricing practices are costing New Zealanders tens of millions of dollars a year, but we think the focus should be on the supermarkets fixing their problems, not putting the responsibility on shoppers to chase the supermarket every time there’s a pricing issue.”

Last year, New Zealand shoppers provided Consumer with a huge body of evidence demonstrating the scale of problematic pricing practices at our major supermarkets. Problems included the price on display not matching the price at the till, loyalty card pricing being displayed as the default, and multibuys that worked out to be more expensive than purchasing the products separately.

“We collected and analysed over 600 examples of problematic pricing, which formed the basis of a complaint to the Commission in July 2023.”

"We understand the Commission's Fair Trading Act investigation into problematic pricing practices is ongoing and is separate from today's announcement. We are looking forward to the findings of this important work resulting in a meaningful enforcement outcome from the Commission.”

Consumer says a disclosure regime for complaints is a step in the right direction and will force the supermarkets to finally implement systems that record complaints, and the actions taken to resolve them. However, this regime will take time to set up and will be reliant on supermarkets categorising complaints in a consistent and logical manner. It will also be heavily dependent on consumers reporting issues and the supermarkets honestly disclosing them to the Commission.

"We have concerns that without careful monitoring by the Commission, there could be room for the supermarkets to game the system. Consumer thinks the Commission should be responsible for monitoring pricing discrepancies, not shoppers," says Rasmussen.

The advocacy group first shared its concerns about misleading pricing with the supermarket giants in early 2023, months before it lodged an official complaint with the Commission.

However, Consumer continues to receive regular supermarket pricing complaints.

“More than a year on from our plea to the supermarkets to improve their pricing and promotional practices, our research found that 66%¹ of shoppers noticed a pricing inaccuracy at the supermarkets, with 12% of those shoppers spotting issues very often or every time they go shopping.”

Consumer’s research from April this year also found a fifth of shoppers who pointed out pricing inaccuracies felt the store handled their complaint poorly.

“Shoppers shouldn't have to pay for the mistakes of the supermarkets, particularly when financial stress related to food is so high.”

Foodstuffs’ and Woolworths’ refund policies

Woolworths’ current policy is to issue a full refund to a customer when charged more than the shelf price and allow them to keep the item purchased.

Foodstuffs’ current policy is to refund the difference between the advertised price and the price charged.

“In April 2023, we wrote to Foodstuffs and asked it to mirror Woolworths’ refund policy, to lessen the financial impact of pricing errors during a cost of living crisis. It took no notice of our request. We hope there will be a more positive response now the Commissioner has intervened.”

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