MEP urges major stores to clarify price cuts

TESCO and other major multiples have been urged to clarify their policies in relation to price promotions so that consumers can be sure they are getting real value.

MEP Máiréad McGuinness said it was extremely difficult for consumers to keep track of movements in prices and to know whether they were getting the best bargains for their euro.

Ms McGuinness is chairperson of a retail group set up by the European Parliament that is working to bring about greater transparency in pricing.

She said it was important for consumers to know whether Tesco actually took a reduction in its profit margin in favour of offering value to customer, or put pressure on its suppliers to provide goods at a lower cost.

“This pressure can be relentless on suppliers of both food and non-food products and it is time that consumers get full transparency in pricing, something they do not have currently,” she said.

Last weekend, Tesco announced it was launching a €35 million initiative to lower prices on more than 1,000 everyday essential items by an average of 12%.

Tesco Ireland marketing director Kenny Jacobs said the cuts would be highlighted in all Tesco stores along with thousands of other products that were cheaper than their competitors.

“With a general trend of increasing inflation across our economy, this is the next step on Tesco’s part to drive value for shoppers,” he said.

About 35% are own-brand products and Mr Jacobs said Tesco intended to maintain the reduced prices for at least six weeks.

Tesco pointed out that some price increases in recent months had been due to inflationary pressure from world commodity markets and the post-Christmas period had also seen the end of some promotional cycles.

Editor of Irish grocery magazine Checkout, John Ruddy, said prices were changing all the time in the grocery sector, which left consumers confused when they heard about price cuts.

“If a retailer wants to be seen as the cheapest, perhaps they should be more transparent in what they do,” he said.

Mr Ruddy believed that Tesco’s current price promotion was really about it being perceived as having the lowest prices

“In some areas Tesco is the cheapest on the market and in others it is not at all,” he said.

Director of independent grocers’ group RGDATA, Tara Buckley, said: “Consumers can get real value for their money in local independent shops and should not be duped by PR and spin by these big players who are trying to lure them into their outlets.”