Mike Watkins, senior manager of retail services at AC Nielsen, says the potential rewards of tempting shoppers with discounting are huge. "Consumers are hooked on promotions”, he says, "On average, about 80% of UK shoppers are looking for price promotions - that's the highest in Europe. Low prices are now expected.”
Retailers across a variety of sectors are becoming more adept at playing within the rules. Some have even employed teams of former Trading Standards officers to advice on the best way to negotiate legislation.
According to one former retail marketer, these teams are intended to help navigate the rules on discounting and build strong relationships with local Trading Standards officers. He also accuses the latter of taking a relaxed approach to enforcement. 'They aren't exactly the most proactive people in the world. If something is outside the strict letter of the law, they won't take much notice,' he says.
One potential problem for retailers is the growing consumer trend to shop around and use aids such as price-comparison sites. Future brand managing director Janice Montgomery says big brands inevitably attract more interest in their business practices, so Tesco's place as one of the UK's most trusted brands will be harder to maintain as customers become savvier. 'If Tesco is (manipulating its prices as claimed), then it needs to be careful' she warns. 'If the press continues to pursue this, it could become an issue.'
The supermarkets may not be able to get away with such practices for much longer, as the Department of Trade and Industry is reviewing the rules. Consumer minister Ian Mc Cartney plans to revamp the pricing code as part of the forthcoming Unfair Commercial Practices Directive, which is due to come into effect at the end of the year.
There are no indications yet as to the changes that could be implemented, nor whether the one-store 28day rule will be altered following the review, which brackets discounting with practices such as prize-draw scams, aggressive door-to-door salesmen and bogus dosing-down sales. However, it is clear that Mc Cartney intends to stamp down on any possible misleading of the public. 'Whether shopping in the high street or online, consumers have a right to be sold to honestly and fairly,' he says. The new protection will make life a lot tougher for the rogues and easier for legitimate businesses to operate’.
Discounting is an essential weapon in any retailer's marketing armoury, appealing to consumers' bargain hunting instinct. But it is not as though super markets are giving anything away -food prices have risen continually over the past two years, according to ACNielsen. As consumers become savvier to the deals they are really getting retailers may be forced to rethink how they lure them in, or risk damaging hard earned trust in their brand.
Retailers across a variety of sectors are becoming more adept at playing within the rules. Some have even employed teams of former Trading Standards officers to advice on the best way to negotiate legislation.
According to one former retail marketer, these teams are intended to help navigate the rules on discounting and build strong relationships with local Trading Standards officers. He also accuses the latter of taking a relaxed approach to enforcement. 'They aren't exactly the most proactive people in the world. If something is outside the strict letter of the law, they won't take much notice,' he says.
One potential problem for retailers is the growing consumer trend to shop around and use aids such as price-comparison sites. Future brand managing director Janice Montgomery says big brands inevitably attract more interest in their business practices, so Tesco's place as one of the UK's most trusted brands will be harder to maintain as customers become savvier. 'If Tesco is (manipulating its prices as claimed), then it needs to be careful' she warns. 'If the press continues to pursue this, it could become an issue.'
The supermarkets may not be able to get away with such practices for much longer, as the Department of Trade and Industry is reviewing the rules. Consumer minister Ian Mc Cartney plans to revamp the pricing code as part of the forthcoming Unfair Commercial Practices Directive, which is due to come into effect at the end of the year.
There are no indications yet as to the changes that could be implemented, nor whether the one-store 28day rule will be altered following the review, which brackets discounting with practices such as prize-draw scams, aggressive door-to-door salesmen and bogus dosing-down sales. However, it is clear that Mc Cartney intends to stamp down on any possible misleading of the public. 'Whether shopping in the high street or online, consumers have a right to be sold to honestly and fairly,' he says. The new protection will make life a lot tougher for the rogues and easier for legitimate businesses to operate’.
Discounting is an essential weapon in any retailer's marketing armoury, appealing to consumers' bargain hunting instinct. But it is not as though super markets are giving anything away -food prices have risen continually over the past two years, according to ACNielsen. As consumers become savvier to the deals they are really getting retailers may be forced to rethink how they lure them in, or risk damaging hard earned trust in their brand.
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