Competition in the UK retail sector has never been more fierce, as the major players' almost obscene rush to outbid each other to buy Safeway clearly shows, but many of the claims made by companies about their competitors should be taken with a pinch of salt, at least if the evidence of a recent ruling by the Advertising Standards Agency (ASA) is anything to go by.
The ASA this week ruled on a claim by Safeway that its prices were lower than those of market leader Tesco - a claim more usually made the other way around and one which Tesco has in fact used as an argument for its proposed takeover of Safeway.
Tesco complained about a leaflet promoting in-store offers for a number of Safeway products. The leaflet proclaimed that for all these products, Safeway charged less than Tesco, using phrases such as 'Sold by Tesco, cheaper at Safeway' and 'A great deal you won't find at Tesco'.
The Tesco complaint was based on a number of points, not all of which were upheld by the ASA. Firstly, the UK market leader said that the Safeway leaflet did not make it clear to consumers that the promotional prices offered by the smaller company were in fact compared to Tesco's regular prices, and that as such it was an unfair comparison.
Tesco also complained that the statement 'A great deal you won't find at Tesco' implied that similar deals to those advertised in the leaflet could not be found in Tesco stores, and that the headlines also implied that Safeway guaranteed customers a cheaper weekly shop than Tesco.
The ASA did not support Tesco's claim that the price comparison was unfair, arguing that the whole purpose of the leaflet was to show the special offers and deals that were available at particular Safeway stores at a particular time.
"They [Safeway] said each leaflet advertised a range of special deals and stated both the period during which the offers were available and the participating stores," the ASA said in a statement. "They said that for the past three years they had used the leaflets, which were distributed to homes in the vicinity of participating stores and were usually valid for one week.
"They explained that the leaflets were designed to communicate their short-term weekly promotions, and that many of their customers were familiar with the purpose of the leaflets and would know the prices offered were for a short period only. The advertisers argued that the leaflet referred clearly to Safeway 'deals' throughout, that it specified that they were weekly deals and that small print on the front, back and middle pages stated that the deals were valid from Wednesday 4 September to Tuesday 10 September only."
The ASA agreed, saying that because customers would be aware that the prices in the leaflet were promotional prices and because the leaflet stated the period for which those prices were valid, it was clear that Tesco's normal prices were compared with the advertisers' promotional prices.
Safeway was not so fortunate, however, when it came to the other two complaints. The ASA said that the leaflets implied that comparisons had been carried out between Safeway and Tesco prices, and that similar deals could not be found following a visit to Tesco's store in Greenford. While every page of the leaflet clearly stated that prices had been checked at the Tesco Greenford store, the ASA said that this was not enough to dispel the overall impression from the leaflet that the advertised deals could not generally be found in Tesco stores.
Tesco in fact pointed out that during the time the leaflet was valid, some of the advertised products were available at Tesco stores at prices equal to or lower than those proposed by Safeway, and the ASA ruled that Safeway had not clearly shown that deals similar to those advertised were not available in Tesco stores in areas other than Greenford in which the Safeway leaflet was valid.
On the final issue of whether Tesco or Safeway offered a better deal on a regular weekly basis, the ASA once again ruled in favour of Tesco. Safeway argued that the leaflet had never claimed that customers' normal or weekly shop would be cheaper at Safeway than at Tesco, or that Safeway was cheaper overall. Since the leaflet referred to 'deals' offered by Safeway, any claims could only refer to those particular products and over the specific promotional period, it said.
The ASA disagreed, however, saying that the claim did indeed imply that customers who bought the advertised products would get a cheaper shop than if they bought the same products at Tesco stores. "The advertisers had not sent evidence to show that deals similar to those advertised were not available in the Tesco stores in all the areas in which the Safeway leaflet was valid, nor that the products featured in the leaflet could be bought more cheaply in their stores than in the Tesco stores in the leaflet distribution area," the ruling stated.
Commenting on the general practice of such promotional leaflets, the ASA said it was concerned that Safeway had only visited one Tesco store before making such a general claim about price comparisons, and warned Safeway that unless it could show that the price of a product would not differ in competitors' other stores, comparisons should be made with stores in the same locality.
It also commented on the fact that the leaflet was valid for a three week period, during which time there was no verification of whether the prices compared at Tesco's store had themselves been lowered - thus making the leaflet incorrect.