In February last year, the Advertising Standards Authority (ASA) upheld a complaint of misleading pricing made by Carpetright against ScS, and ruled that the MRP prices on some of the carpets advertised on its website – against which savings claims such as ‘40% off’ were made – were not accurate, and could not be substantiated. We asked a few members of our retailer panel how integral sales were to their business, and how the regulations surrounding reference pricing influence which products they discount, and when …
Ross Beveridge (Archers Sleepcentre): I do feel there are still many retailers using misleading reference pricing, and as such we continue to see ridiculous adverts offering up to 70% ‘off’.
On one of my recent mystery shopping expeditions, a retailer was advertising 70% off, plus a further 30% – I’m not quite sure how that one even works!
The reality is no business can trade with 70% off prices. We operate a varied selection of promotions throughout the year. These are entirely genuine sales, the 10% or 20% is deducted from the product price at the time of transaction, and the product is sold at the full price stated before and after the sale period.
We have, in fact, just finished a three-month Trading Standards audit, and I’m happy to say we were given a clean bill of health – indeed, any recommendations would always be rectified immediately.
Ethical retailing is at the core of everything we do now, and I would like to see more retailers join the minority, adopt this approach and abolish falsely-inflated price establishing. Unfortunately, I see it being some time before this becomes common practice throughout retail, and until then the public will always be drawn into misleading sales as many retailers are forced to jump on the bandwagon just to tread water.
Royce Clark (Grampian Furnishers): This is a topic I feel strongly about, as I really think the nationals who run never-ending sales do nothing to help the furniture trade’s reputation. That said, in my experience, the consumer is more aware of inflated RRPs than ever, and we can only hope that this continues.
My ethos has always been to have competitive prices all year round. We rely mainly on repeat custom, so I don’t think it would be possible (or ethical) to be charging double the price for a sofa, only to reduce it to the normal price the next month, and for a good customer to see that!
We tend to do one main genuine clearance sale each year with other promotions throughout. We ran our seventh [sales specialist] Lynch sale in a row in 2016, and it was our busiest yet, so I would like to think that is down to it being a genuine event, where customers know it’s the best time to buy.
Can the OFT change the industry as a whole? I doubt it, as most of the nationals are a law unto themselves – but perhaps they can be reined in a bit, and we independents can work together to promote more transparent pricing.
Steve Pickering (Sussex Beds): Sales and promotions have become the norm within modern day retailing. Our marketing calendar moves monthly from one promotion to another. We only hold two annual ‘sales’, which encompass all product categories (winter and summer). The remaining promotions target specific products, categories or added-value campaigns.
The sales and promotion culture is here to stay, and to some degree is expected by today’s consumer. It is well publicised that retail footfall continues to fall, and with fewer people visiting stores conversion becomes more important – and offers do aid conversion.
We do not use the MRP when a product is on offer. Reductions are always deducted from our original selling price. MRPs can be misleading and adjusted to suit. In my view, MRPs should not be used, and ideally legislation should be introduced to stop the practice and protect the consumer.
Read more retailer responses in our Year in Review special, published in the January issue of Furniture News each year. This article was originally published in January 2018.
