CTSI welcomes CMA Unit Pricing Inquiry
The Chartered Trading Standards Institute (CTSI) has welcomed the publication of an Inquiry undertaken by the Competition and Markets Authority (CMA) into unit pricing across the UK.
The Inquiry into unit pricing comes at a time when consumers are facing a higher cost of living both in-store and online. The Office for National Statistics reported 49% of people are shopping around more because of increases in the cost-of-living. Mintel reported 34% of consumers are stocking up on products whilst they are discounted, and 33% are switching to cheaper brands.
The CMA has primarily focused its unit pricing review on the practices of 11 nationwide supermarkets. However, they have also considered the unit pricing practices of seven nationwide variety store retailers that sell general merchandise, e.g., hardware, toys, and furniture.
Key findings from the Inquiry include:
- there were varying degrees of non-compliance in all retailers surveyed, though non-compliance was worse among some variety-type stores than in supermarkets
- the report makes recommendations to tighten the legislation on unit pricing and notes the thinly stretched resources within Trading Standards to enforce the regulations
- there is a recommendation to amend the Price Marking Order (PMO) to make the legislation clearer on matters of legibility and proximity, ensuring that unit pricing is more easily readable for consumers whilst in-store and more prominent relative to the selling price itself. The report also advises that the PMO and relevant weights and measures legislation be updated to specify retailers should use only one unit of measurement per product type, to ensure consistency of unit pricing across channels
- the definition of unit price in the PMO should be reviewed and other weights and measures legislation updated, so that shoppers are able to effectively compare unit pricing of the same product type in-store, and to reduce the scope for retailers to unit price items of the same type by item or by weight. This review should ensure that any lists of products unit priced by item reflect current market practice.
CTSI Chief Executive, John Herriman, said: “We welcome the CMA’s Inquiry into the important issue of unit pricing, particularly at a time when consumers are noticing price hikes more than ever with the higher cost of living. Many of these policy proposals are much-needed, such as making unit pricing more legible, consistent, and more prominent compared to the selling price.
“However, we would ask the CMA to go further in clarifying some areas including instances where retailers are exempt from displaying unit pricing to consumers. Currently, stores under a certain size are exempt, but this leaves confusion as to whether smaller branches of large retail chains or concession stands within big stores must provide unit prices. It also potentially leaves consumers without unit pricing in these situations.
“As the CMA has noted, the Society of Chief Officers of Trading Standards in Scotland, and Northern Ireland Trading Standards have discovered broader pricing inaccuracies in addition to these issues with unit pricing, and we are pleased to hear that the CMA will explore partnership with Trading Standards to do similar research across England and Wales, to ensure we get the most accurate pricing for consumers.
“It is good to hear that CMA recognises the pivotal role that Trading Standards plays in enforcing any new unit pricing regulations, however with funding cut by approximately half since 2010 in local Trading Standards services, this provides a reminder of how crucial our officers are in ensuring that consumers get what they pay for during their weekly shop.”
In addition to these legislative changes, the CMA has written to multiple retailers looked at in the survey, to ask that they comply with current unit pricing requirements, and is calling on retailers to introduce accurate, clearly legible unit pricing before any changes are made to the law, in order that customers are able to compare reliably between products.
Although CTSI welcomes the Inquiry and these proposals from the CMA, there are still questions around the clarity of some of the law. Small businesses are exempt from having to provide unit pricing; however, these exempt businesses are defined by measurement of the store, being exempt if they are under 280 square metres. This has led to confusion over whether small, local branches of large chains should be exempt, or whether concession stands in large stores are exempt. More clarity is needed in this area for adequate enforcement and provision of accurate information for consumers.
The CMA also intends to do further research into consumers’ use of unit pricing and the potential savings that customers can make by using unit pricing in their decision making. A further update to this work will be provided in Autumn 2023.