ASA Adjudication on HomeForm Group Ltd

Ad

A TV ad and an internet sales promotion, for fitted bathrooms, kitchens and bedrooms:

a. the first part of the TV ad featured bathrooms and included a voice-over that stated “the Dolphin half price summer sale is now on ... and, until 4 pm Sunday, get an extra thousand pounds off.” Text on screen stated “Discounts off list price. Discounts apply to complete / fully fitted bathrooms ... ”. The voice-over in the second part, which featured kitchens, stated “ ... the Moben half price sale is now on and this week only get an extra thousand pounds off.” Text on screen stated “Discounts off list price. Minimum spend £3500”;

b. the sales promotion appeared next to an image of a bedroom; it stated “50% OFF MANY RANGES PLUS AN EXTRA 15% OFF SELECTED RANGES THIS WEEK”.

Issue

The ASA received two complaints from members of the public, who challenged whether the advertised discounts were genuine.

CAP Code (Edition 11)

BCAP TV Code

Response

HomeForm Group Ltd (HFG) said fluctuations in price due to seasonal sales and ongoing competitive pressures were a feature of the retail bathroom and kitchen supply sectors; they regularly reviewed and often updated promotions in line with market trends and the current offers of their competitors. They said they generally did not publish their list prices in glossy brochure format because they preferred the flexibility of printing them locally. However, they were happy to show customers their price lists at the point of sale. They said they considered the lists to be commercially sensitive documents and would prefer not to make them freely available to their competitors. In addition, they were not aware of any company that produced a price list for a fully installed service.

They also said they understood why the complainants might have thought their previous was prices appeared slightly high compared with those of some of their competitors, who advertised the price of components only. That could be explained, however, by the fact their prices were inclusive; they offered a full installation and project management service, including design, room adaptation, bespoke components, installation and a comprehensive guarantee. They said the seasonal offers they adopted in their pricing structures were very similar to those adopted by their main competitors. Consequently their own previous prices referred to in the ads were genuine and akin to those generally applicable to comparable goods that were sold by their competitors at times when they were not making promotional offers.

HFG said they accepted that the ads should have indicated the date(s) on which the higher prices had applied in line with their preferred practice, however, due to a misunderstanding, they had reverted back to the qualifying statement "Discounts off list price", which might have created the erroneous impression that the higher prices were notional or were RRPs (recommended retail prices). They said that was not the case, however, and that the higher prices referred to in the ads applied between 25 May and 20 June 2010, in accordance with BERR (Department for Business Enterprise and Regulatory Reform) guidelines, which they said were the standard guidelines by which all retail sectors validated their price comparisons. They said they had followed Government good practice and had used the same criteria for comparison as that used by their immediate competitors. HFG submitted advertising material and price lists published or issued by their competitors, which they believed demonstrated that the higher reference prices used in their comparisons were comparable with those offered by their competitors in non-promotional periods. They said that data showed the higher prices used as the basis of the comparison in the ads were genuine reference prices and they, like their competitors, had a reasonable expectation that they could sell significant quantities of the goods at those prices.

In relation to ad (a), Clearcast said they sought verification from HFG that their discounts adhered to BERR guidelines; they received confirmation that was the case.

Assessment

Upheld

The ASA noted HFG said the higher prices used as the basis of the savings claims had previously been charged for a period of almost four weeks. We noted the 2008 BERR Pricing Practices Guide stated that a previous price used as a reference price should be a genuine retail price whereby retailers might reasonably expect that they could sell a significant number of the goods at that price and where a significant quantity of the goods were placed on sale at that price. It also stated the previous higher price and the actual price retailers intended to charge for the product were likely to be material information needed by the consumer. It stated a comparison with a retailers own previous price should in general be the immediately previous price for the product; if it was with an earlier price, as was the case with the prices used as the basis of the comparisons in the ads, the basis of the comparison should be made explicit. It also said the period of time for which the lower price would be available should not be more than that for which the higher price was available.

We noted the advertising material and price lists HFG submitted in relation to their competitors prices but also noted that we had not seen any evidence related to the prices at which HFG sold the relevant products either before or after the advertised discount was applied. We noted the ads did not make clear that the prices used as the basis of the comparison related to competitors non-promotional prices and considered, particularly, but not only, because ad (a) included the on-screen text "Discounts off list price ... ", that consumers would therefore expect the advertised discounts to be based on HFGs own non-promotional prices. Nevertheless, we considered lists of prices and previous advertising material, whether they related to the advertisers own prices or competitors prices, did not constitute evidence that the prices on which the discounts were based were the prices at which the products were generally sold.

We noted we had not seen details of the "list prices" referred to in ad (a) as the basis of the comparison. We had also not been provided with evidence, for example in the form of sales data, to demonstrate that the prices on which the advertised discounts were based were genuine or were the prices at which the products were generally sold, or were anything other than notional prices at which the products were rarely, if ever, sold. Because HFG had not demonstrated that the advertised discounts were genuine, we concluded that the ads were misleading.

The ads breached CAP Code (Edition 11) clauses 3.1 (Substantiation), 7.1 (Truthfulness) and 15.5 (Prices) and CAP (Broadcast) TV Advertising Standards Code rules 5.1.1 (Misleading advertising), 5.2.1 (Evidence) and 5.3.1 (Accurate pricing).

Action

The ads must not appear again in their current form. We told HFG to ensure discounts advertised in future related only to prices at which they could demonstrate the products had been generally sold.

Adjudication of the ASA Council (Broadcast)

Adjudication of the ASA Council (Non-broadcast)