Thursday, March 5, 2015

Are you being ripped off at the Supermarket?

You walk out the door of the shop and think "Did that really cost that much?" 
My own recent experiences of being overcharged in both mainstream supermarkets (a Tesco) and upscale food retailer (Donnybrook Fair) made me examine how many times we pay more for food than we think.

I shop in many different places. I never do a trolley shop in the multiples but I cruise around them now and again to check what's going on. I also shop for small items frequently in a "I need sugar for the children's flapjacks right this minute" kind of way as I'm passing a Dunnes, Tesco or Aldi. I also get lots of store cupboard foods in Aldi - chopped tomatoes, chick peas, kidney beans and their own brand yoghurt is fantastic - I know the farmer who makes it.   

The reality is that no matter how much food writers dislike them, supermarkets are the linchpin of our food landscape. In a word, Irish food is a dichotomoy. On one hand we want quality, provenance and we champion Irish artisan produce. But the reality of how we procure food is a cheap food retail war where the German discounters have the fastest growing grocery share in the country. 

Food inflation is at its lowest for many years. While we may think this value phase of endless offers and deals suits consumers, supermarkets still frequently charge above the listed price for goods, often without customers knowing.  Are the penalties for overcharging big enough and why do some supermarkets seem to be repeat offenders?

Recently I went out onto the streets of Dublin to test consumers views on food value, to find out what we do when we find a supermarket has ripped us off. I reported the results on RTE Radio's Drivetime programme. 

The agency in charge of policing overpricing is the Competition and Consumer Protection Commission. Recently they published their list of enforcement actions taken against traders who charged more for goods than the price displayed. These included a couple of Centras, Tescos, Supervalues, Boots, and Spars in different locations around the country.

The agency's information is gathered from consumers who complain directly to them. But they also carry out what they call "pricing compliance blitzs". This is where mystery shoppers investigate whether supermarkets are correctly displaying prices and then charging the price demonstrated. If the shop is found to be in breach of one of these regulations they are given a compliance notice or a fine of 300 euro to say they have been in breach of the legislation.

All cases are followed up and if not compliant the Commission have the option to go to court. So it's a stepped enforcement strategy. The interesting thing is that the discounters in Ireland - German chains Aldi and Lidl don't appear in the list. 

Simple German efficiency? It's hard to imagine that overcharging is a means by which multiples gain revenue, but if not, why haven't they sorted it out?

I interviewed Isolde Goggin from the Competition and Consumer Protection Commission about why it might be happening - whether overcharging is an error or a way of doing business.

The non-statutory organisation - the  Consumers Association of Ireland - think that the penalties for overcharging are simply not big enough, despite there being scope in consumer legislation for bigger fines. So what might work to deter this practice?

It's a debate worth having and as long as supermarkets take billions out of the economy, why should they add more revenue at the expense of unknowing consumers. 

The item is available to listen to at the link below. Happy Shopping!

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