Make your price labels clearer, watchdog tells UK supermarkets | Supermarkets

Supermarkets must make price labels clearer so customers can more easily compare deals, the UK’s competition watchdog has said.

Food retailers will also be subject to a detailed investigation into competition in 10 product categories including milk, bread, and baby formula as part of efforts to ensure households benefit from competitive prices as cost inflation falls.

The Competition and Markets Authority (CMA) said it had not found that weak competition had driven historically high food price inflation. Average operating profits in the retail grocery sector fell by more than 40% in 2022-23, compared with the previous year, while average operating margins declined from 3.2% to 1.8%, the CMA said. The findings pour cold water on fears that “greedflation” from supermarkets pumping up inflation.

Its report said not everyone was benefiting from strong competition, particularly those who could not travel to large stores or shop online and may “rely on higher-priced convenience stores” instead.

Sarah Cardell, the CMA chief executive, said: “With so many people struggling to feed their families, it’s vital that we do everything we can to make sure people find the best prices easily. We’ve found that not all retailers are displaying prices as clearly as they should, which could be hampering people’s ability to compare product prices.

“We’re writing to these retailers and warning them to make the necessary changes or risk facing enforcement action. The law itself needs to be tightened here, so we are also calling on the government to bring in reforms.”

“We’ve also looked at how competition is working across the grocery retail market more widely. The overall evidence suggests a better picture than in the fuel market, with stronger price competition between all of the supermarkets and discounters.

“In the next phase of our work, we will examine competition and prices across the supply chain for the product categories we’ve identified. We’ll also continue to monitor the situation to ensure that competition remains effective as input costs start to fall.”

The watchdog said it had identified inconsistent pricing, with different measurements used for similar types of products making it hard to compare – such as teabags being priced per 100g for some products and others priced per teabag.

The CMA said unit prices was in some cases not clear enough or missing – such as for online shoppers or on specific promotions.