Background

Summary of Council decision:

Two issues were investigated, both of which were Upheld.

Ad description

Two sales promotion price labels, seen in store on 20 April 2016, and a website www.unitedcarpetsandbeds.com, seen on 25 April 2016, for carpet retailer United Carpets:

a. The product label for the "Satino Romantica" range contained text that stated "HALF PRICE SALE PLUS AN EXTRA 25% OFF Today". The label also featured a "WAS" price with "£79.96 PER SQ.MTR" crossed through, a "HALF PRICE" price with "£39.85 PER SQ.MTR" crossed through, and further text that stated "NOW ONLY £29.88 PER SQ.MTR" and "TODAY THAT'S ONLY £24.99 PER SQ.YARD".

b. The product label for the "Satino Royale" range contained text that stated "HALF PRICE SALE PLUS AN EXTRA 25% OFF Today". The label also featured a "WAS" price with "£95.66 PER SQ.MTR" crossed through, a "HALF PRICE" price with "£47.83 PER SQ.MTR" crossed through, and further text that stated "NOW ONLY £35.87 PER SQ.MTR" and "TODAY THAT'S ONLY £29.99 PER SQ.YARD".

c. The product search results for the “Satino” carpet line on the website showed products from the "Satino Royale" range and the "Satino Romantica range". The results for the "Satino Royale" range displayed a crossed through price "£95.66 m²", accompanied by the price "£47.83m²" in red. The results for the "Satino Romantica" range displayed a crossed through price"£79.69 m²", accompanied by the price "£39.85 m²" in red.

Issue

Carpetright plc challenged whether:

1. the higher prices and the savings claims in ads (a), (b) and (c) were misleading and could be substantiated; and

2. the price claims "TODAY THAT'S ONLY £24.99 PER SQ.YARD" in ad (a) and "TODAY THAT'S ONLY 29.99 PER SQ.YARD" in ad (b) were misleading, because they believed the claims created an impression that they represented further savings against the 'per metre square' prices.

Response

1. United Carpets (Franchisor) Ltd t/a United Carpets stated that their price savings had been established and referred to genuine higher prices at which they had sold significant stock. They provided a copy of their pricing history for both the Satino Romantica and the Satino Royale ranges. The pricing history covered the six months prior to the date on which the ads were seen, namely from 12 October 2015 to 1 May 2016, and included details such as the prices at which the ranges were sold, the length of time the products were sold at a particular price point, the number of orders, and units sold. They stated their pricing history showed that their offers were undertaken in accordance with the BIS Pricing Practices Guide.

United Carpets also explained that the pricing history, which reflected their brand pricing policy for both carpet ranges, showed the pricing displayed on their website during the period covered. They explained that the discounted prices shown in ads (a) and (b) differed from those on the website, as the store in which ads (a) and (b) appeared was a franchise store which did not appear to have adhered to United Carpets’ brand pricing policy and had run their own discount promotion.

2. United Carpets stated that it was a legal requirement under the Price Marking Order 2004 that the product prices were expressed in ‘per square metre’. Their experience was that their customers still needed and valued the ‘per square yard’ price, as it was a unit of measurement that they were familiar with and understood. In response, they included the ‘per square yard’ price, which was intended to provide customers as a point of reference in order that they would not need to carry out the complex calculations themselves. United Carpets also stated that the inclusion of the ‘per square yard’ unit of measure was entirely in compliance with the relevant pricing legislation.

United Carpets stated that the positioning of the ‘per square yard’ price was deliberately separate to the savings claims, which were expressed in ‘per square metre’ prices to avoid confusion. They also said those savings claims clearly ended with a ‘now’ price, indicating the price payable instore that day. They further stated that the ‘per square yard’ price did not include any language that suggested a saving and pointed out that it was presented in the ad as ‘today’s’ price to make clear that it was not a historical reference price.

United Carpets also said the average carpet consumer would be aware that a square metre was larger in area than a square yard, and consequently they would also understand that the price difference was due to a difference in measurement units, rather than any savings.

They did not believe the average consumer would understand it to be a further saving and they had not received any customer feedback suggesting that that might be the case.

Assessment

1. Upheld

The ASA considered that consumers were likely to understand from the reference “HALF PRICE SALE PLUS AN EXTRA 25% OFF Today” in ads (a) and (b) that United Carpets were promoting a further reduction in an ongoing sale promotion. We also considered that consumers were likely to understand that the “WAS” prices – £79.69 in ad (a) and £95.66 in ad (b) – represented the prices at which the respective carpet ranges were usually sold; the “HALF PRICE” prices – £39.85 in ad (a) and £47.83 in ad (b) – represented the initial reduced prices within the sale promotion; and the “NOW ONLY” prices – £29.88 in ad (a) and £35.87 in ad (b) – and “TODAY THAT’s only” prices – £24.99 in ad (a) and £29.99 in ad (b) – represented further reduced prices within the same promotion. We further considered that consumers were likely to expect that the savings claims represented genuine savings against the usual selling prices of the carpet ranges if they took advantage of the instore offer.

In respect to ad (c), we considered that consumers were likely to understand that the higher prices that had been struck through (£79.69m² for the Satino Romantico and £95.66m² for the Satino Royale) represented the price at which the carpets were usually sold, and expect that they would achieve genuine savings against those prices.

While we noted United Carpets’ comments that the franchise store had further discounted the products, we understood that the pricing history and sales data provided by United Carpets covered their store network. We, however, had not been provided with further documentary evidence, such as order invoices, to support the sales figures to demonstrate whether the carpets had been sold at the “WAS” prices. Notwithstanding that, the pricing history of the products indicated that the prices at which the carpets were offered alternated between the “WAS”, “HALF PRICE” and “NOW” price points. For the majority of the period covered, the number of days for which the carpets were offered at the “WAS” prices would be the same or similar to the number of days at the “HALF PRICE” prices, before the price reverted back to the “WAS” price. The carpets were offered at the ”WAS” prices for 45% of the time during the period covered, with 32% of sales of the Satino Romantica and 33% for the Satino Royale made at that price. The carpets were offered at “HALF PRICE” for 34% of the time during that period, and at the “NOW” prices for 21% of the time (including a period of 41 consecutive days between 21 December 2015 and 31 January 2016, the longest single period at one price). 68% of sales of the Satino Royale and 67% of the Satino Royale were made at either the “HALF PRICE” or “NOW” price points.

Given the volume of sales at each price point, and the durations for which the different prices were charged, we considered that the evidence provided had not adequately demonstrated that the “WAS” prices represented the prices at which the respective carpet ranges had been usually sold. We therefore concluded that the higher prices and associated savings claims in ads (a), (b) and (c) were misleading.

On that point, the ad breached CAP Code (Edition 12) rules  3.1 3.1 Marketing communications must not materially mislead or be likely to do so.  (Misleading advertising),  3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation.  (Substantiation) and  3.17 3.17 Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication.  (Prices).

2. Upheld

We noted that the price claims “TODAY THAT’S ONLY £[X]” in ads (a) and (b) were stated in red against a white background within a text bubble with a thick black border. The claims were positioned directly below the “WAS”, “HALF PRICE” and “NOW ONLY” prices consecutively in a column, which were stated in red against a yellow background, with the “WAS” and “HALF PRICE” prices having been crossed through. Three of the prices were in square metres, with only the “TODAY THAT’S ONLY” price being in square yards. We considered that the price in square yards was the most prominent in each ad.

We noted the advertiser’s comments about the Price Marking Order 2004. While we did not assess ads under that legislation, we did consider that its requirements, as well as those of the Weights and Measures Act 1985 (as amended), would affect the way prices were generally presented to consumers, and would therefore influence consumers’ expectations of how price claims would be presented in ads. We understood that legislation concerning weights and measures required that most weighing or measuring of goods at the point of sale or letting to be exclusively in metric, with limited exceptions. Further, in accordance with the price marking legislation, imperial units and measures were only permitted as a supplementary indication provided they accompanied an indication of quantity in metric unit that was more prominent of the two. Given the mandatory requirements on an indication of quantities at the point of sale and also subsequently in advertising and labelling, we considered that consumers were likely to expect that products sold from bulk would ordinarily be priced in metric, and that carpets would predominantly be sold in metric units.

We noted that the product labels were comparatively small in relation to the products themselves, and the accompanying text that denoted the unit measurements was considerably smaller than the actual price claims. Given that, and the consumer expectations set out above, we considered that the text denoting the unit measures could easily be missed. Further, given the visual prominence and the positioning of the “TODAY THAT’S ONLY” price claims, we considered that consumers were likely to assume that those prices represented a further reduction from the “NOW ONLY” price, rather than the same price being shown in different units. Because that was not the case, we concluded that the presentation of those two prices in ads (a) and (b) was misleading.

On that point, the ads breached CAP Code (Edition 12) rules  3.1 3.1 Marketing communications must not materially mislead or be likely to do so.  (Misleading advertising) and  3.17 3.17 Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication.  (Prices).

Action

The ads must not appear again in their current forms. We told United Carpets to ensure that future ads did not make savings claims that were likely to be understood as representing the usual selling prices of the product, unless they held adequate evidence to substantiate the claims. We also told them to ensure that future ads did not present prices in a misleading manner through the use of different quantity units.

CAP Code (Edition 12)

3.1     3.17     3.7    


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