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UK DIY News

Tesco caught operating two tiered pricing

Industry figures have revealed that on a range of 800 items stocked by the retailer, prices in Scotland cost shoppers 5pc less than elsewhere – contravening the supermarket's national pricing policy by slashing prices in Scotland, but not in the rest of the UK.

The retailer attributed the discrepancy to a "technical error" and denied that it was a secret test of geographic
pricing.

A spokesman for the retailer said: "A relatively small number of products at our Scottish stores were incorrectly priced by a small amount. This was caused by a technical error as our Scottish stores are being moved to a new pricing software system. The error has now been corrected."

Local pricing by national supermarket chains is frowned upon by the UK competition authorities as it can mean some consumers with fewer local retailers can face disproportionately higher costs.

In 2000, Tesco and other big supermarket chains assured the Competition Commission that it operates a "national pricing policy" – charging the same prices for its products in all of its stores. However, this commitment does allow retailers to adjust prices according to the format, for instance, an Express shop on a high street will typically be more expensive than a larger Extra store which is located outside the town centre.

Competition regulators have conducted two inquiries into the supermarket industry since 2000, and have largely granted its approval, despite protests from smaller retailers and food manufacturers.

The difference in pricing comes just weeks after figures from the Office of National Statistics revealed the volume of food purchased by consumers last month fell 4pc on the same month a year earlier, the first such fall it has recorded.

Source : The Telegraph.co.uk
www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8687519/Tesco-caught-operating-two-tiered-pricing.html

08 August 2011
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Max Crosby Browne - CEO, Home Decor
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