Sainsbury's (SBRY) has become the first of the major supermarkets to catch onto to the advice service's new findings, confirming it will phase out the majority of its multi-buy promotions by the end of August. However, certain offers will still appear at specific times during the calendar year.
MAS belives that, rather than encourage customers to save money, many of the existing 'buy one get one free' or other such deals actually mislead customers into buying unnecessary quantities and wasting food and money.
A recent study by MAS also concluded that supermarket shoppers spend an extra 21 per cent per week on average by falling victim to swaths of promotional deals. Similarly, consumer research body Which? also made a formal complaint to regulators last summer, arguing that supermarket shoppers were regularly subjected to misleading and unfair promotions, which used fake prices to imply disingenuous discounts. All of this has caught the attention of the Competition and Markets Authority (CMA), which is in the process of drafting new laws to enforce a ban on misleading promotions.
Naturally, this has implications for the downward price war that has dogged the UK's grocery industry since heavy discounters Aldi and Lidl arrived on the scene a few years ago. So far in 2016, price deflation and heavy discounting has shown little sign of letting up; Morrisons (MRW) announced it would cut prices across more than 1,000 products just to keep customers loyal.
However, it's worth noting that the phasing out of promotions and multi-buy options doesn't mean the UK's big four supermarkets will have to revert prices to former levels. Instead, companies such as Tesco (TSCO), which has been working hard to cut prices to what it believes are sustainably low levels, will be allowed to keep them there. The new guidelines - which will be binding - won't ban price cutting in general. They'll only ban promotions and multi-buy offers that aren't transparent and trick the customer into spending more.
*This article was updated on 19 February 2016 to remove references to the Money Advice Service being called a "watchdog", or regulator.
