Summary of Council decision:
Three issues were investigated, all of which were Upheld.
Online ads for Homebase offers appeared on the advertisers own website www.homebase.co.uk from December 2013 to March 2014.
a. An ad that appeared from 21 to 17 December stated "60% off Kitchen Units Selection Bathrooms Schreiber Fitted Bedrooms ends 5 March. Plus an extra 20% off Even on existing offers when you spend £150 or more ends 17 December".
Ads that appeared from 18 to 24 December:
b. the ad stated "SALE 60% off Kitchen Units Selected Bathrooms Schreiber Fitted Bedrooms Ends 5 March";
c. the ad stated "20% off everything 20% off everything* ends 1st January Discount automatically applied in the trolley. For reservations the discount will be applied in store". Terms and conditions apply. *When you spend £50 or more".
d. An ad that appeared between 2 and 7 January stated "60% off Kitchen Units selected Bathrooms Schreiber Fitted bedrooms Ends 5th March Plus an extra 20% off Even on existing offers when you spend £150 or more Ends 7th January Discount automatically applied".
e. An ad that appeared between 8 and 16 January stated "60% off Kitchen Units selected Bathrooms Schreiber Fitted bedrooms Ends 5th March Plus an extra 15% off even on existing offers when you spend £150 or more Ends 16th January Discount applied in trolley For reservations the discount will be applied in store".
f. An ad that appeared between 17 and 19 January stated "SALE 60% off Kitchen units Selected bathrooms Schreiber fitted Bedrooms Plus an extra 20% off Even on existing offers Ends 19 January".
g. An ad that appeared from 20 to 22 January stated "SALE 60% off Kitchen units Selected Bathrooms Schreiber Fitted Bedrooms Ends 5 March".
h. An ad that appeared between January 23 and 2 February stated "SALE 60% off Kitchen Units selected bathrooms Schreiber Fitted Bedrooms Plus an extra 20% off* when you spend £150 or more. Ends 2nd February".
i. An ad that appeared between 3 and 5 February stated "SALE 60% off Kitchen units Selected Bathrooms Schreiber Fitted Bedrooms Ends 5th March".
j. An ad that appeared between 5 and 12 February stated "SALE 60% Kitchen selected Bathrooms Schreiber Fitted Bedrooms Plus an extra 15% off when you spend £150 or more Ends 12 February".
k. An ad that appeared between 13 and 14 February stated "SALE 60% off Kitchen Units selected bathrooms Schreiber Fitted Bedrooms Ends 5th March".
l. an ad that appeared between 15 and 16 February stated "15% off everything Even on existing offers Starts Sat 15th Feb ends Sun 16th Feb in store. Available exclusively online Mon 17th Feb".
m. An ad that appeared between 17 and 19 February stated "SALE 60% off Kitchen Units, selected Bathrooms, Schreiber Fitted Bedrooms Ends 5th March".
n. An ad that appeared between 20 February and 5 March stated "SALE 60% off Kitchen Units, selected Bathrooms Schreiber Fitted Bedrooms Plus an extra 15% off* when you spend £150 or more Ends 5th March".
o. An ad that appeared between 6 and 26 March stated "1/2 price Kitchen Units selected bathrooms Schreiber Fitted Bedrooms Plus we pay the VAT when you spend £150 or more ends 26th March".
p. An ad that appeared between 27 March and 16 April stated "1/2 Price Kitchen units selected bathrooms Schreiber Fitted Bedrooms Plus an extra 15% off ** when you spend £150 or more. Ends 16 April".
B & Q challenged whether:
1. the promotions were misleading because they failed to make clear when the higher references prices for the kitchens were charged;
2. the offers were misleading because different promotions ran consecutively without the normal prices being re-established; and
3. the overlay promotions were extended (and in some instances improved) beyond the original closing dates which disadvantaged customers who bought during the initial sale periods.
1. Homebase Ltd (Homebase) said the main offer started in December and that the normal price against which that first 60% discount was based ran from November to December 2013, for a period of 28 days, which they believed met the requirements for establishing a reference price. They said that the reference price in the ads (against which the discounts applied) remained constant throughout the promotion, but pointed out that the offers on the kitchens only applied to in-store purchases because customers needed to discuss their plans with a kitchen designer. They said that once in the store, consumers were made aware of the duration over which the reference price had been in place. They provided a pricing history of products, which had been selected at random by the ASA Executive from the large range of items and bundles that were included in the offers. They accepted that, in the light of a recent ASA adjudication on a similar issue, in this instance because the duration of the promotion was longer than the duration during which the reference price was in place, the ads may not have been compliant with the CAP Code. They acknowledged that future promotions needed to take this position into account.
2. They said the 60% sale applied from 12 December to 5 March and that the shorter term overlay promotions that ran concurrently as the main promotion ended when stated (in the ads) and then reverted back to the core offer. They believed there was nothing in legislation or the advertising Codes at the time the ads appeared which required that retailers return their prices to the full reference price at the end of the stated offer period. However, they were aware of changes to pricing guidance to which they would adhere. They added that a recent ASA adjudication had further laid out the advertising requirements with regard to referencing pricing and acknowledged that changes needed to be made to some promotional ads.
3. They said that at various times the standard 60% offering was enhanced by an 'overlay' promotion which came in two separate forms. They said that one applied to only the stated ranges and others were 'corporate events'. They said ads such as "15% weekends" were corporate events that applied across the entire store, not just to the 'big ticket' area of kitchens, bathrooms and fitted bedrooms. They therefore said the business could not have two overlays applying at the same time. They said that where the overlay only applied to a specific area, this was stated in the ad in order to avoid confusion and to prevent consumers from thinking that the discount applied to a different range. They said each offer would have a different spend threshold and therefore a customer may not meet the threshold in order to obtain the discount. They did not believe these were extensions to the promotions and were not advertised as such, and that at the end of the overlay, the price returned to the standard offer (60% off or ½ price) until the end of March. They provided a timeline of the overlay promotions. They said that although they would reduce the number of overlays within a certain period, they did not believe giving consumers differing periods for offers disadvantaged them and that in fact, the differing promotions allowed them to have more choice about when to purchase and not to be rushed into making a decision.
They believed that consumers who bought during the commercial periods were not disadvantaged and, with regard to kitchen units argued that they were just part of the total kitchen and that the offers on appliances or fittings may have been of interest to the consumers and that ultimately these savings could have made the overall purchase price cheaper and therefore of more benefit to them.
1. & 2. Upheld
The ASA considered consumers who saw each of the ads (a−p) would understand that the kitchen offers had been made against the price at which the items were normally sold.
We noted B&Q (the complainant) had identified 16 ads that covered two main sales promotions, within which additional promotions (overlays) occurred. The first promotion was a "60% off" sale and the second promotion was a "1/2 price" sale (on the same products). The previous price (for the kitchen units) against which the promotions had been based had been in place for 28 days. Two sales promotions ran consecutively. The first was a "60% off" sale which ran for 83 days, and the second, a "1/2 price" sale (on the same products), which started on the day after the previous sale ended and ran for 32 days.
We acknowledged that consumer decisions over large and expensive purchases such as kitchens were likely to be taken over a longer period of a time than less expensive products and that the duration of the main sales promotion provided consumers with time to make such a decision without feeling rushed. The 83-day sale period was significantly longer than the 28-day period over which the higher reference price for the kitchen units had been in place, and we therefore considered that during that time, the "60% off" sale prices had become the normal prices for the products when the ads were seen. Because of that, we considered that the ads implied that the pre-60% selling price was the normal price at which the products were sold, but because that was not the case, and because the ad did not make clear the duration over which the reference price was established, we considered ads (a−m) were likely to mislead consumers into believing that greater savings were available than was actually the case.
Furthermore, we considered that in order for the "1/2 price" sale featured in ads (o) and (p) to use the original reference price from the "60% off" sale (established for the 28 days prior to the original 83-day sale period) as the reference price, this price should have been re-established for a sufficient period of time after that original sale, in order for it to reasonably be considered as the 'normal' price on which the offer was based. However, because that price was not re-established and the "60% off" sale price had, by its duration, become the 'normal' selling price, we considered that the "1/2 price" sale ads were offered against a price that had not been established and were therefore likely to mislead consumers into believing they were making more of a saving than was actually the case.
We therefore concluded that ads (a−p) exaggerated the savings that were likely be achieve by consumers.
On this point ads (a−p) breached CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising).
We considered that consumers would understand from each of the overlay promotions that the additional offer (on top of the main offer) was only available to them for the period stated in the ad and that this may have influenced the speed over which they responded to the particular ad they saw. Many of the main promotions contained overlay promotions within them, which included additional price reduction offers on top of the main offers (and in some instances on all items in store including the sale items). Those promotions ran for 68 days throughout the main promotion. Each individual overlay lasted between 2 and 14 days, with some overlay promotions starting immediately following the end of the previous one (the next day) and others after a short period (between 2 and 7 days), during which only the main promotion applied. During the overlay periods the offer fluctuated between "15% off" and "20% off" (with some minimum spends applying in some instances) or where a "15% off" promotion was followed (sometimes immediately and sometimes bridged by a short period where no overlay applied) by another "15% off" promotion.
We considered that consumers who viewed an overlay ad and who would not have been aware of any future promotional plans, would assume that the closing dates detailed in the overlay promotions were an accurate indication of the end of the period during which that offer was available and would therefore respond to the promotion by that date. We considered that where one overlay was immediately followed by another and where the offer amount was reduced (i.e. from 20% to 15%), the closing date was unlikely to be misleading because consumers would not be disadvantaged by the follow-on offer which was not as good as the offer they had seen. However, some of the overlays were immediately followed by another overlay sale where the offer was the same, or better (from 15% to 20%). We considered that this constituted an extension or improvement on the original overlay, resulting in the original overlay closing dates being inaccurate and misleadingly implying that the offer detailed in that ad would end on the date given. We therefore considered that where overlay ads were immediately followed by another and where the offer discount was the same or better, the ads were likely to mislead.
Where overlays were followed by a period during which the price reverted back to the main offer (60% off or ½ price) and which was then followed by another overlay where the offer was the same or better, we considered that this interim period needed to be longer than the surrounding overlay promotions in order for the main sale price to re-established. On a few occasions, the interim period was longer than the surrounding overlay periods and we considered that in those instances, the main sale price had been re-established and the overlays (and interim standard sale promotions) were not misleading. However, we noted that on other occasions, the interim periods were the same or shorter than the surrounding overlay periods and that on those occasions, the main sale price had not been re-established thus rendering the preceding overlay offer misleading because it was followed by another overlay (without the price being properly re-established) and was therefore tantamount to an extension of or an improvement to, the previous overlay.
We therefore considered that where overlays were immediately followed by the same or better offer, or where the main sale price was not properly re-established (and then followed by the same or better offer) the ads were likely to mislead and concluded that ads (a), (c), (e), (f), (j), (l) and (n) breached the Code but that ads (b), (d),(g),(h), (i), (k), (m), (o) and (p) did not.
On this point ads (a), (c), (e), (f) (j), (l) and (n) breached CAP Code (Edition 12) rule 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising ).
On this point we investigated ads (b), (d), (g), (h), (i), (k), (m), (o) and (p) under CAP Code (Edition 12) rule 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising), but did not find them in breach.
The ads should not appear again. We told Homebase Ltd to ensure that savings claims were made against normal product prices and that savings claims were not exaggerated.