British anti-trust regulator the Competition and Markets Authority (CMA) has announced plans to initiate a review of supermarket loyalty pricing.
The review is part of the regulator’s larger programme to address cost of living pressures in the grocery sector.
It began this month and will scrutinise whether loyalty schemes such as Tesco‘s Clubcard and Sainsbury’s Nectar offer genuine promotions and assess their impact on consumer behaviour and market competition.
The CMA’s programme of work is designed to ensure that loyalty pricing strategies do not mislead shoppers or unfairly disadvantage certain consumer groups.
In addition, the review will delve into the nature of these promotions and whether they are as beneficial as they appear to customers.
It will also consider the broader implications of loyalty pricing on how supermarkets compete with one another.
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The CMA has not yet reached any conclusions regarding the fairness of loyalty pricing or its impact on the grocery sector.
The regulator in a statement said: “The review is at an early stage and we have not formed any views on the issues. We are now beginning our engagement with supermarkets.”
An update on the review will be published in July this year, with the CMA anticipating the review to be completed by the end of this year.
The announcement comes after the CMA in November 2023 said that it would probe loyalty scheme pricing by major supermarkets.
Last February, the regulator also launched an investigation into unit pricing practices both online and in stores across the sector in the UK.
Unit pricing shows the cost of a particular product by weight or volume, helping customers find the best value for money.