The Competition and Markets Authority (CMA) has started its review into whether UK supermarket loyalty pricing is misleading shoppers.
The investigation will consider factors such as if a loyalty price is a genuine promotion or as good as a deal is presented, and will look into whether any groups of shoppers are disadvantaged by this type of promotional activity.
The competition watchdog will also review whether loyalty pricing is impacting consumer behaviour and if it has an impact on how supermarkets compete with each other.
Subscribe to Grocery Gazette for free
Sign up here to get the latest grocery and food news each morning
The review is currently at an early stage, however the CMA is beginning its engagement with supermarkets.
It is due to publish an update on its work in July, and expects to complete the investigation by the end of this year.
This forms part of a wider programme of work to help tackle cost-of-living pressures in the grocery sector.
Last year, the watchdog looked into whether supermarkets had been profiteering, following accusations that they had been unfairly raising the price of everyday products during the cost-of-living crisis
However, it discovered no evidence of “greedflation” and instead found that profits had dropped across the sector as supermarkets had not been passing on the full impact of rising prices onto shoppers.
In November, the CMA also looked into branded suppliers and found that three quarters of brand owners of products such as baked beans, mayonnaise and pet food had pushed up prices by more than their costs increased, which “contributed to higher food price inflation”.
However, while it found that there is evidence of profiteering, in most cases there are cheaper own-label alternatives available.
As many consumers have switched away from brands, it said that this has led to a decline in brands’ market share and profits.
