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ASA upholds complaint on pre-promotion pricing at Homebase

Homebase team member

The Advertising Standards Authority has upheld a complaint against Homebase in relation to the retailer's pre-promotion pricing.  The following text is taken from the ruling:

Ad:
A sales promotion shelf label, seen in a Homebase store, offered a lawn mower at a discounted price. Text stated "Take an extra 15% off ... Today you pay £118.99 ... Normal price £139.99".

Issue:
The complainant, who understood that the product had been advertised for £111.99 for a few weeks prior to the sale and that the price had been increased to £139.99 a few days before, challenged whether the claim "Normal price £139.99" was misleading and could be substantiated.

CAP Code (Edition 12)
3.13.173.403.78.2

Response:
Homebase Ltd stated that the product had been introduced on 1 January 2015 at £139.99 and remained at that price until 9 February 2015. It then went on promotion from 9 February until 31 March 2015 when it was promoted at £111.99. After 31 March the price reverted to £139.99. They also explained that they had run a 15% off event, which applied to all items in store, on 14–15 February and on the Easter weekend, which was when the product was available for £118.99. They said the price had not been deliberately increased before the Easter 15% event, but that the planned promotional period for the product had ended. Homebase also provided sales data for the product showing the number of units that had been sold at the relevant price-point on a weekly basis from January to June 2015.

Assessment:
Upheld

The ASA considered that consumers viewing the ad would expect the “Normal price” of £139.99 to represent the price at which the product was usually sold by Homebase. We noted that before the Easter weekend promotion the product had been offered for £139.99 for a shorter period of time than it had been available at the discounted price of £111.99, or less (during the February 15% event). We also reviewed the sales data provided and noted that in the period of 1 January to 9 February no units had been sold, whereas a high number of sales had been achieved during the promotional period. Further, while we noted that some sales had been achieved during the week commencing 29 March, when the product had been available for three different prices, we could not determine from the information provided how many units had been sold for £139.99.

In light of the fact that no sales had been achieved at £139.99 before 10 February, the price of £111.99 had been available for a longer period of time and a number of sales had been achieved at that price-point, we did not consider the fact the higher price of £139.99 had applied for two days before the Easter weekend sale demonstrated that the price of £139.99 was Homebase’s usual selling price for the product. Therefore, in the absence of adequate evidence to substantiate the claim that the product’s “Normal price” was £139.99, we concluded that the claim was misleading.

The ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising), 3.7 (Substantiation), 3.17 (Prices), 3.40 (Price comparisons) and 8.2 (Sales promotions).

Action:
The ad must not appear again in its current form. We told Homebase Ltd to ensure they held adequate evidence to demonstrate that their “normal prices” represented the price at which their products were usually sold.

Source : ASA
https://www.asa.org.uk/Rulings/Adjudications/2015/7/Homebase-Ltd/SHP_ADJ_300263.aspx#.VbkcrvlVhHw

29 July 2015

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Thank you for the excellent presentation that you gave at Woodbury Park on Thursday morning. It was very interesting and thought-provoking for our Retail members. The feedback has been excellent.

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Martin Elliott. Chief Executive - Home Hardware.
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