ASA Adjudication on Argos Ltd

Ad

An ad in the Argos catalogue price update for a Wharfedale DMP82 DAB MP3 Micro System was headed "Less than Half Price." The price £37.99 was shown in large type to the left of a photograph of the system. Underneath a further heading, "Previous in-store price," was the price £89.99, which appeared in smaller type and was crossed through. Text underneath the prices stated "Has previously been on sale for £68.09."

Issue

A reader, who visited his local branch as a result of receiving the update but who was told by staff there that it was not listed as an item for sale, challenged the availability of the item at the promotional price.

CAP Code (Edition 11)

Response

Argos sent information about their stock levels for the product as of 24 February (three weeks before the complainant visited his branch).  The information said Argos had a total stock holding of more than a thousand of the units.  They explained that they were forced to take delivery of the item later than expected, which they said had led to the item being unavailable in the complainant's branch when he visited it.  They sent sales data for the week the complainant visited his branch and for the preceding seven weeks and subsequent fifteen weeks totalled across all their branches.  They said they had planned the promotion using current and historical data to anticipate likely demand.  They sent data relating to anticipated and actual sales of similar hi-fi products during previous promotions.

Argos said the item was not featured in their catalogue; that it was restricted to a broadsheet which was distributed to stores and that the line would not be promoted again.  They said their broadsheets always stated that stock was subject to availability and that they were not aware of any similar complaints about this line.

Assessment

Upheld

The ASA noted from the sales data Argos sent that demand for and sales of the item rose significantly during the promotion but that demand had exceeded availability for the whole of the period the data covered.  We noted that, in the week of the complaint, no units had been available at the complainant's branch and he had not been offered the opportunity of obtaining it from stock or another branch.  Across all branches, demand exceeded availability by more than 4:1 that week, and by approximately 3:1, 2:1 and 2:1 in the three weeks preceding.  We noted that the price of the product had been reduced by more than half.  However, we noted that, in the previous promotions Argos had used as evidence to show that they had anticipated demand for the present promotion, the price reductions were less significant (between 11% and 16% on products originally priced between £59.99 and £127.19, for instance).  We considered that, because the price reduction was greater in the present case, it was likely that demand would be greater than in the previous promotions and that Argos should have ordered stock accordingly.  We noted that the CAP Code stated "phrases such as 'subject to availability' do not relieve promoters of the obligation to take all reasonable steps to avoid disappointing participants."  Because we did not consider Argos had shown they had taken sufficient steps to anticipate the likely demand for the product or that they had been able to satisfy that demand, we concluded that the ad had given a misleading impression of its availability at the promotional price.

The ad breached CAP Code clauses 3.1 (Substantiation), 7.1 and 7.2 (Truthfulness), 16.4 (Availability) and 27.3, 27.4 and 30.1 and 30.2 (Sales promotion rules).

Action

The ad must not appear again in its current form.  We reminded Argos to ensure they had sufficient stock in place to meet likely demand.

Adjudication of the ASA Council (Non-broadcast)