The Tesco strawberries case – what did Tesco do wrong?Print publication
In 2011 a pensioner complained to Trading Standards after seeing a punnet of Tesco strawberries on sale for £1.99, marked down to half price from £3.99 per punnet. She asked staff whether the punnets had ever been on sale at that higher price. The staff did not respond.
Birmingham Trading Standards brought a case against Tesco under the Consumer Protection from Unfair Trading Regulations 2008 (the Regulations). The Regulations prohibit traders from using unfair commercial practices towards consumers which prevent them from making free and properly informed decisions in relation to the promotion, sale or supply of consumer products. A commercial practice is misleading if “it or its overall presentation in any way deceives or is likely to deceive the average consumer”.
Misleading acts or omissions are unfair commercial practices under the Regulations. A misleading action contains false information or in some way deceives (or is likely to deceive) the average consumer and a misleading omission is when a trader omits or hides material information which the average consumer needs to make a properly informed decision.
In this case, the argument was that Tesco had misled customers by presenting the promotion in a way that was likely to deceive customers into thinking that the discount was greater than it actually was.
The Birmingham Crown Court heard that Tesco had sold the punnet at £3.99 for one week, then at £2.99 for a second week, before selling them at £1.99 for 14 weeks. The prosecution maintained that the £3.99 was an artificially inflated price and that the “real” price was £1.99 and that the purpose of the sale at the higher price was simply to display the “real” price as “half price”.
Tesco pleaded guilty to four offences under the Regulations.
Guidance from the Department for Business, Innovation and Skills states that the period for which a product is heavily discounted should not exceed the period during which it sold at full price (although there is an exception for cases where there is excess stock, which was not the case here), a point emphasised by the judge.
The fine of £300,000 is substantially smaller than the £2.3 million that it is claimed Tesco netted from its promotion. However, the costs of any reputational damage may be harder to ascertain. The message for retailers is to ensure that the period of a discount does not exceed the period at which the product was sold at full price.