Misleading loyalty card offers cost Tesco and Sainsbury’s dear

TESCO and Sainsbury’s have missed out on a Which? recommendation after the consumer champion claimed their loyalty card schemes are “misleading”.

Both supermarkets were denied the coveted “Which? Recommended Provider” (WRP) in the latest evaluation. The criteria take into account customer satisfaction, the speed and quality of service, prices, and the freshness of products. For their in-store offerings, no retailers were awarded the WRP badge, although Waitrose and Ocado won it for their online delivery options.

Tesco and Sainsbury’s were reported to the competition watchdog last year by Which? after the consumer body accused them of giving shoppers the impression they were saving more than they were. The loyalty pricing schemes mean customers with a Clubcard or Nectar cards can access discounts on products across the stores. For Tesco Clubcard holders, a packet of Birds Eye Fish Fingers drops from £3.29 to £2.95, while at Sainsbury’s those with a Nectar card can buy six hot cross buns for £1, rather than £1.40.

A Which? Investigation in 2023 claimed the loyalty card prices were “misleading”, because shoppers can still buy the products cheaper elsewhere.

The consumer body reported Tesco to the Competition and Markets Authority (CMA) in June, saying it was not showing prices per unit on Clubcard deals. In January, the CMA announced a review of loyalty pricing, including whether it could mislead or disadvantage customers.

Last week, Tesco said it would change how it was displaying products to include the price per unit for Clubcard prices. Concerns have been raised about how the data that the supermarkets collect through the loyalty schemes is used. The two supermarkets make an estimated £300 million a year from selling the data collected.

Tesco was also criticised by Which? for its failure to stock budget range products in smaller shops, while Sainsbury’s was challenged over the freshness of some of its products.

Separate to the award of the WRP, Marks & Spencer topped the Which? rankings for in-store supermarket performance for a third year in a row.