How Special Are Supermarket Specials?

Wednesday, 6 November 2024, 6:14 pm
Article: RNZ

Susan Edmunds, Money Correspondent

New research from Consumer NZ shows supermarket promotions aren't always as special as they appear - and "boosts" offering higher rewards may come at a higher price.

Consumer NZ conducted an eight-week survey of pricing at supermarkets in Auckland, Wellington and Christchurch.

But researcher Belinda Castles said it found that when products were advertised as specials, it did not always mean they were the lowest price available.

"For instance, at Woolworths Lower Hutt, 15 of the 22 tracked products were on special four or more times, while New World Hutt City had 13 items frequently on sale. Pak'nSave Lower Hutt maintained the lowest price for our basket of goods despite fewer specials."

Fresh'n Fruity yoghurt was priced as "extra-Low" at Pak'nSave Papanui for all eight weeks of Consumer NZ's survey and the price was lower than the New World club deal during that period, and two weeks of Woolworths' special.

But Consumer NZ was worried the consistent "extra low" message could mislead shoppers into believing it was only for a limited time.

Foodstuffs told Consumer NZ its supermarkets were individually owned and operated and could set their own prices. "Our store owners use a variety of measures to set their in-store pricing. It's not uncommon or misleading for one store's promotional pricing to be similar to another store's regular pricing."

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At New World Hutt City, Palmolive dishwashing liquid was marked at $2.79 as a 'super-saver'. while at Pak'nSave, it was regularly priced between $2.39 and $2.99 without any special pricing.

It was on special at Woolworths for $2.50 for one week and $2.80 for three weeks.

Professor of marketing analytics at Massey University Bodo Lang told Consumer NZ the excessive use of sales promotions made it harder for shoppers to know what a normal price would be.

"Consumers are easily manipulated in a highly complex environment like a supermarket, where there are tens of thousands of products vying for shoppers' attention.".

Consumer NZ said there should be more transparency and accountability in supermarket pricing.

"We support the idea of everyday low pricing to enhance consumer confidence that they are getting a genuinely good price," Castles said,

Consumer NZ earlier looked at the value offered by "boosted" products at Woolworths, which offer a shopper extra rewards points.

But Consumer NZ's Rebecca Styles said for the three weeks she tracked her boosted offers earlier this year, she could have got the products cheaper at Pak'n Save.

"Of the 35 boosted products I was offered over those weeks, only one was cheaper at Woolworths than Pak'nSave.

"While not all of the boosted products were available at Pak'nSave, we substituted with a similar branded product. If there wasn't a suitable substitution, we left it out of the comparison.

"If I had bought all of the boosted products I was offered, I would have accumulated 4850 points - enough for two $15 vouchers and 850 points towards the next one.

"Yet those vouchers could be false economy, given I could probably have spent less on an alternative product."

This week, a two-litre bottle of Anchor cream was offered as a boost with a price of $16.30, but it was on sale at Pak'nSave for $15.77.

Styles said her concern with the Boost programme was that people had to choose to "boost" the products before shopping, which was an incentive to then choose that product rather than looking for a better deal.

Everyday Rewards NZ director Mark Burger said boosts were a key way to earn points.

He said offers were personalised to shoppers based on their prior purchases.

"The Everyday Rewards app is the easiest way to access Boosts, with the offers also accessible on the Everyday Rewards website.

"Over 200,000 Everyday Rewards members are activating their Boost offers every week and enjoying the additional rewards. Members who activate and redeem their Boosts are getting 5x more rewards vouchers than members who just scan their card, and we're hearing great feedback from our members on the programme and the added value they're receiving with Everyday Rewards."

Consumer NZ last year complained to the Commerce Commission about supermarket specials, which launched an investigation. A spokesperson said it was expecting a decision this year.

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