Summary of Council decision:
One issue investigated and Upheld.
Claims on www.sainsburys.co.uk, seen on 6 November 2017, promoted Haagen-Dazs ice cream. Text stated, "Only £3.00: Save £1.00".
The complainant challenged whether the savings claim was misleading.
J Sainsbury plc (Sainsbury’s) said the claim was based on a genuine saving on the product, having taken into account the Chartered Trading Standards Institute’s (CTSI) Guidance for Traders on Pricing Practices. They said the guide listed a number of issues that should be considered when determining whether a price reduction was genuine, and provided guidance on what was more likely to comply in relation to certain circumstances. One of those was that the price comparison was made for a period that was the same or shorter than the period during which the higher price was offered. They provided data showing the pricing history going back to approximately a year before the ad was seen.
Sainsbury’s said their data clearly demonstrated that the savings claim represented a promotional price that was offered for no longer than the higher price had been in the period immediately preceding the promotion.
They said the higher price of £4 was offered no more than three weeks before the comparison was made on their website with no intervening prices and therefore the savings claim gave a genuine indication of the promotional price of the product. They also said they had sold a significant number of units at the higher price which demonstrated that the £4 reference price was a realistic selling price. Additionally, they said at the time the ad appeared other retailers sold the same product at a higher price than the £4 reference price they used. It was therefore a realistic selling price.
The ASA considered that consumers would understand from the ad that the saving represented a genuine saving against the usual selling price of the product at the time the ad appeared.
The pricing history showed that, since 19 March 2017, the price had fluctuated between a ‘base price’ of £4 and a ‘promo’ price of £3, every 21 days.
The CTSI Guidance for Traders on Pricing Practices offered practical advice to traders on the consumer protection laws and associated practices. While we noted that the guidance provided a set of principles rather than statutory rules, and non-broadcast advertising claims were ultimately assessed under the CAP Code, we took the Guidance into account when making our assessment. The Guidance stated that a practice was more likely to comply if a comparison was made for a period that was the same or shorter than the period during which the higher price was offered. It did not give specific advice on situations where that practice was repeated on a regular basis for the same product. We considered it was relevant to consider the fluctuations in the context of the consumer understanding set out above, that the higher price would be the usual selling price of the product.
Because the ‘base price’ of £4 and the promotional price of £3 followed a cyclical 21-day pattern, the lower ‘promo’ price was therefore not offered for longer than the higher price against which the saving was being claimed. However, we considered that if consumers had been aware of that pattern they would regard the product as having two distinct prices of £4 and £3, neither of which represented the usual selling price. We considered that those regular fluctuations and lack of usual selling price would be likely to affect consumers’ perceptions of the value of the offer, and whether or not the claimed ‘saving’ was genuine.
Because consumers were likely to understand that the claimed saving represented a genuine saving against the usual selling price of the product, and because that was not the case, we concluded that the savings claim was misleading.
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) 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).
The ad must not appear again in its current form. We told J Sainsbury plc to ensure that future savings claims did not misleadingly imply savings against the usual selling price of the product.