Summary of Council decision:
Two issues were investigated, both of which were Upheld.
A national press ad and website ads for a Morrisons sales promotion:
a. The press ad seen on 23 May 2014 was headed "ANY 3 FOR £10. £5 each" and seven bottles of wine were pictured: Campo Viejo - Rioja; Wolf Blass - Shiraz; Martini - Prosecco; Wolf Blass - Chardonnay; Gallo Family - White Grenache; Echo Falls - Chardonnay; and, Blossom Hill - White Zinfandel". Text underneath stated "Max 12 per customer". Small print at the bottom of the ad stated "Available in most stores in England and Wales. Excludes Scotland. Subject to availability. While stocks last .. Excludes M local".
b. The Morrisons website, www.morrisons.com, included an offer on the home page. Text stated "Any 3 for £10" and "Selected Wines 75cl" and three bottles of wine were pictured.
c. A web page in the "Offers" section of the website was headed "Any 3 for £10. £5 each" and five bottles of wine were pictured. Text underneath stated "Martini Prosecco - Campo Viejo Tempranillo Rioja - Gall Family Vinyands White Grenache - Blossom Hill White Zinfadel - Wold Blass Red Label Shiraz Cabernet, 75cl". Small print below stated "Offers/products available in most stores while stocks last ... Excludes M Local and Scotland. Limited to a combination of 12 bottles per customer".
The ASA received two complaints:
1. Both complainants, who had visited a number of stores but had been unable to purchase any of the wine shown in the ads and therefore did not believe Morrisons had made a reasonable estimate of the likely response to the promotion, challenged whether the ads were misleading.
2. One complainant challenged whether ad (a) was misleading, because it did not include an end date for the promotion.
1. Wm Morrison Supermarkets plc t/a Morrisons said that based on their experience of similar offers they estimated they would sell around 530 000 bottles of wine in the promotional period. The promotion started on Thursday 22 May and was intended to run until Saturday 1 June, in a total of 446 stores in England and Wales. They had allowed a contingency stock of 399,000 bottles. When estimating likely demand for the promotion they followed general industry practice and they provided a spreadsheet which detailed those calculations. They said they did not have a record of previously running any 3 for £10 offers on wine. They said they had taken the highest sales for a week of each product line included, when they were on their strongest deal in the most prominent position. They said some of those deals were very strong, for example one product was on "save one third" plus part of an additional "buy six save 23% offer", and that the offers had been advertised in prime time viewing spots. They then calculated a reduction based on how similar the products were to each other and other deals they had on at that time, because this offer was an overlaid deal on top of their existing promotions. They then pro rata'd for the ten-day offer period and applied a 25% uplift based on the strength of the offer compared to previous offers. Finally they estimated a contingency stock of 1.8 times the offer uplift. They said the 25% uplift was based on the data from their previous strongest offers on wine, plus a generous margin for error. They considered that the very large contingency stocks would cover any potential 'run' on the products. With hindsight they said that demand from small traders purchasing the products to resell might have affected the accuracy of the estimate. They based this on existing available stock and therefore some product lines had more contingency stock than others. The final sales for the offer were slightly higher than their total predicted and contingency stock due to stock held by stores.
They said their monitoring system quickly alerted them to the fact that sales had taken off exponentially and some stores reported that they had started to run low on stocks of some wines on the first day. On 23 May they decided to withdraw some advertising in order to limit the exposure of the offer. They also arranged for contingency stock to be delivered into stores on 24 May. In spite of those actions they said that the demand for the offer was unprecedented and it became clear they would not be able to meet the demand up until the planned offer end date. They were not able to source any further stocks of the wines initially included in the offer and they therefore added three more products of similar quality including Veluti Shiraz Rose to the offer, totalling 138,000 bottles. By the end of the offer they had sold over 1,000,000 bottles of the wines included in the promotion. They provided a spreadsheet which showed how many bottles of each product were sold on each day of the promotion.
They said they adapted their advertising due to the stock situation. A planned full page ad booked for 24 May in a national paper was replaced with an ad for a different product. A TV ad was due to be on air from 22 May to 31 May. On 23 May they instructed stations to replace them with ads for unrelated products, and this took effect by midday on 25 May. An instruction to remove all advertising from their website as soon as possible was sent out on 23 May. They provided a copy of an internal email confirming this was complied with. They said there may have been several iterations of the advertisements and banners, and it's possible that something may have been missed during the initial withdrawal of the advertising, given that it was a Bank Holiday weekend. However, all related advertising had been removed by 8pm on Monday 26 May.
They said that although the offer was no longer being advertised, it continued to be applied at the point of purchase until 1 June. They understood that one complainant appeared to have been incorrectly advised by some stores that Blossom Hill White Zinfandel as was not included in the offer. They confirmed that this wine was included in the offer and that when purchased with other qualifying wines a promotional discount would have been applied by the till.
2. Morrisons said they always included an offer end date in ads if it was due to finish within seven days of the ad appearing. They believed this was in line with the Department of Business, Innovation and Skills Pricing Practices Guide. Because this offer was due to end nine to ten days after the ads appeared they did not consider the end date needed to be included. They confirmed that all the wines included in the promotion were lines that they normally sold. They said that they genuinely expected the offer to last for ten days. However, given the strength of the offer and the lack of precedent they considered that "Subject to availability. While stocks last" was a better option than an end date. This communicated to consumers that they did not have an infinite or guaranteed long-term supply of stocks. They said that, given the large demand for the products, including an offer end date would have been misleading.
The ASA understood that Morrisons had calculated their estimate of the likely response by using the highest sales for the product lines in the offer when they had previously been on promotion; that they had included a 25% uplift to the estimate based on the strength of the promotion; and that they had ensured there was contingency stock of 399,000 bottles.
We understood that the actual response to the offer led to some stores reporting very low stock levels on the first day and to promotions for the offer being withdrawn. We considered that the offer was one that was likely to be particularly attractive to consumers and noted that they could purchase up to 12 bottles in a single transaction. We noted that Morrisons had taken a number of actions in response to the demand, including adding additional product lines to the offer and ensuring contingency stock was transported to stores, and also gave instructions for the advertising to be withdrawn as soon as they became aware of the stock issue. However, we considered that the speed with which the advertised products ran out demonstrated that the estimate of demand was not adequate for the purpose of satisfying the requirements of the Code. We also noted that the promotion continued to be advertised for up to three days after the advertiser became aware of the problems with stock levels and concluded that the ads were misleading.
On this 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), 3.29 3.29 Marketers must monitor stocks. If a product becomes unavailable, marketers must, whenever possible, withdraw or amend marketing communications that feature that product. (Availability) and 8.9 8.9 Phrases such as “subject to availability” do not relieve promoters of their obligation to do everything reasonable to avoid disappointing participants. and 8.10 8.10 Promoters must be able to demonstrate that they have made a reasonable estimate of the likely response and either that they were capable of meeting that response or that consumers had sufficient information, presented clearly and in a timely fashion, to make an informed decision on whether or not to participate - for example regarding any limitation on availability and the likely demand. (Sales promotions: availability).
Ad (a) was a national press ad for the offer and included small print which stated "Subject to availability. While stocks last". We considered consumers would generally expect promotional prices to apply for a reasonable period after national press ads appeared, in the context of a fast-moving sector in which prices could fluctuate frequently and might apply on a short-term basis only, but that they were not likely to expect them to be permanent or long term. However, we understood that the offer was intended to last for ten days and that Morrisons had made an estimate of what would be sufficient stock on this basis. We considered that, given this relatively short-term nature of the promotion, it was misleading to omit the offer end date from the ad, because it meant consumers were not provided with the information required to determine how quickly to act to obtain the offer. We considered that had Morrisons intended to communicate that the offer was limited by stock, rather than by a specific period (on which they had based an estimate of required stock), the text in the ad was not presented with sufficient prominence to have done so. Because the ad did not include the end date for the offer we concluded it was misleading.
On this point ad (a) breached CAP Code (Edition 12) rules
Marketing communications must not materially mislead or be likely to do so.
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means. (Misleading advertising), 3.9 (Qualification) and 8.17.4 8.17.4 Closing date
a (Significant Conditions for Promotions).
The ads must not appear again in their current form. We told Morrisons to ensure that they made reasonable estimates of demand for similar promotions in further and that they did not misleadingly omit offer end dates from ads.