ASA Adjudication on John Lewis Partnership plc

Ad

A national press ad showed several images of digital cameras, each with the model details and price stated below. The ad included "Nikon D60 … £459". Text below the images stated "Naturally, all our shops are Never Knowingly Undersold" (see leaflet in store for details) … ". The in-store leaflet stated "We constantly check prices in local shops and if we find the same item cheaper, we lower our price to match, even during Sales [sic] ".

Issue

DSG Retail Ltd challenged whether:

1. the ad was misleading because it did not include details of the significant conditions that applied to the "Never Knowingly Undersold" claim;

2. the ad was misleading because they believed the market price of the Nikon D60 had been lower than £459 for some time.  They said another national retailer had sold the camera at £439.99 or less for 49 days at the time the ad appeared; the same national retailer, and another, had lowered the price to £409.99 several days before the ad appeared;

3. the claim that John Lewis "constantly check prices" could be substantiated.

CAP Code (Edition 11)

Response

1. John Lewis Partnership plc (John Lewis) said the ad clearly directed consumers to the leaflet in store for details of the "Never Knowingly Undersold" (NKU) policy; because NKU only applied in store, they believed that was appropriate.  They said the NKU leaflets and posters were displayed prominently in all of their stores and that approach had worked for many years, the NKU policy having been in place since 1925.  John Lewis said they were unaware of any previous complaints made by consumers or their direct competitors and they did not believe the absence of the conditions in the ad would mislead consumers.

2. John Lewis said the ad appeared between 24 and 29 July 2008 and they had matched competitors prices before and during that period.  They said they used a third party to provide details of their competitors pricing twice weekly and provided spreadsheets to reflect the comparisons they made before the ad appeared.  They also provided records of the price history of the Nikon D60 and said it was on sale at prices less than £459 in their stores before and during the period the ad appeared; those prices reflected competitors price alterations.  They had included their usual retail price of £459 in the ad to ensure honesty in a market where prices were continually changing.  They felt it would be inaccurate to include details in the ad of any price that had been lower only temporarily and believed there was no detriment to consumers who found the camera was cheaper than £459 when they visited the store.  

3. John Lewis said their buying teams set competitive prices and were responsible for maintaining competitive price levels; they were supported by a dedicated pricing team who delivered competitor pricing information twice weekly.  The pricing team had recently increased in size as a reflection of a growing investment in NKU.  They said around 50 members of their store staff had responsibility for carrying out daily price checks in their local area and John Lewis also provided incentives for other members of staff in their 27 stores to check competitors prices; if they found a lower price in the area, the corresponding price was immediately lowered in that store.  They said, although a slightly different arrangement applied in Scotland, if any customer found a lower price anywhere in the UK they would match that price or refund the difference if the consumer had already made a purchase.

John Lewis said they did not plan to repeat the ad.

Assessment

1. Upheld

The ASA noted the NKU policy applied only within the stores of John Lewis and that details of the conditions of the policy were available on posters and leaflets in the stores; they were also available on their website.  We also noted most of the conditions detailed in the leaflet were those that consumers would generally expect from a price-match policy and we considered that it was not necessary to include them in the press ad.  

We noted, however, the "Never Knowingly Undersold" policy did not apply to internet and catalogue competitors and considered that consumers would not necessarily expect that condition to apply.  Because it omitted a significant condition, we concluded that the ad was misleading.    

The ad breached CAP Code clause 7.1 (Truthfulness).

2. Not upheld

We noted John Lewis' pricing history for the Nikon D60 showed it had been on sale in stores for less than £459 since 11 June 2008.  It showed the camera was priced at £439 from that date; DSG Retail said another national retailer had first priced their product at £439.99 on 6 June.  We also noted John Lewis had sold the camera at £409 from 11 July; DSG Retail had said another national retailer had first priced the product at £409.99 on the same day.  The pricing history they provided showed the Nikon D60 was also priced £409 at the time the ad appeared.

Although the store price of the camera was not the same as that in the ad, we considered it would not disadvantage customers to find that it was cheaper than advertised.  We considered John Lewis had taken account of a market where prices changed regularly and had taken steps to avoid misleading consumers by advertising their usual retail price.  Because John Lewis provided evidence that the camera was on sale in stores at the time the ad appeared for less than £459 we considered the ad was not misleading.              

On this point, we investigated the ad under CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness) but did not find it in breach.

3. Not upheld

We noted John Lewis had teams to deliver details of their competitors' prices twice weekly and had members of staff whose responsibility it was to check such prices in their local area on a daily basis.  We also noted they incentivised all members of staff to check competitors' prices and matched prices, or refunded the difference, if consumers found a lower price.  We noted they had provided their pricing records for the Nikon D60 for most of 2008 as well as samples of their comparisons with competitors' prices for July 2008; we considered those records showed that they were aware of the price activity of the market.  Because they had provided evidence of their comparisons with competitors' prices, and details of their methods of monitoring them, we considered the leaflet claim that John Lewis "constantly check prices" was substantiated.

On this point, we investigated the leaflet under CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness) but did not find it in breach.

Action

The ad must not appear again in its current form.  We told John Lewis to ensure significant conditions were clearly stated in future ads.

Adjudication of the ASA Council (Non-broadcast)