ASA Adjudication on Argos Ltd

Ad

The cover of an Argos brochure stated "... Offers valid between 4th October and 3rd November 2006. All offers subject to availability ...". One entry stated "Alonza corner group ... Save £100 ... NOW £699.99"; another stated ... Kolari bedroom furniture - from only £29.99".

Issue

1.  One complainant, who was told that the Alonza corner group was out of stock, challenged the availability of the sofa.

2.  Another complainant challenged the availability of the Kolari bedroom furniture set.

CAP Code (Edition 11)

Response

1. Argos said they had decided to include the Alonza corner group in the promotion on 21 July, 11 weeks before the promotion began.  They had estimated the likely demand for the Alonza corner units by examining the demand for the product over the lifetime of the previous Argos catalogue, which was used between 21 January and 21 July.  They provided evidence that during that period there was, on average, demand for 59 units a week at non-promotional prices and 89 units a week when the units were available at promotional prices. They showed that, after 21 July, there had been an unexpected increase in demand for the units (at non-promotional prices) to 80 units per week and a further increase in demand when the promotion started.

They said they also experienced stock quality problems, which meant that three weeks' worth of stock were returned to their supplier in South-East Asia.  They said, by the time they had communicated the increase in demand and problems with supply to their trading teams, it was too late to remove the items from the brochure or add information to explain the limited availability of the items.

Argos acknowledged that, because they did not have sufficient stock, they should not have advertised the sofas in the promotional brochure and said they would have removed them from the brochure had it been possible.  They said they had informed customers by e-mail and at the till that they could purchase the sofas from mid-November and that they would be available at the promotional price until the end of November.

2.  Argos said they had estimated the likely demand for, and sales of, the Kolari bedroom furniture units by examining the demand for the product over the lifetime of the previous Argos catalogue, which was used between 21 January and 21 July.  They showed that during that period there was, on average, demand for 725 units a week when the items were not available at promotional prices and 1469 units a week when the items were available at promotional prices.  They showed that, after 21 July, there had been an unexpected increase in demand for the items to 2000 units per week.

Argos said, when the decision to include the Kolari bedroom furniture in the promotion was made on 21 July, they had sufficient stock to cater for the predicted level of demand.  However, the unexpected increase in sales immediately prior to the promotion led to shortages.  They said they had asked their supplier to increase production but understood that that would take between 11 and 12 weeks.  Argos said no Kolari bedroom furniture sets were available during October.

Assessment

Not upheld

The ASA noted that, because of a combination of increased demand and limited supply, Argos had not been able to supply either the Alonza corner group or the Kolari bedroom furniture for the duration of the promotion.  We considered, however, that Argos had demonstrated that they had made a reasonable estimate of the likely response to the promotion and that the shortage of stock was caused by factors beyond their control.  We noted Argos had communicated the supply problems to their outlets.

We investigated the ad under CAP Code clauses 16.1 (Availability), 27.4 (Sales promotion rules - Introduction), 30.1 and 30.2 (Sales promotion rules - Availability), but did not find it in breach.

Action

No further action necessary.

Adjudication of the ASA Council (Non-broadcast)