Tesco adds transparent unit pricing to price labels across its Clubcard products to make it easier for customers to determine if a promoted product is actually great value or not.
Supermarket giant Tesco, the nation's largest supermarket, has announced that it will be adding unit pricing across its Clubcard products in the coming weeks to offer clear pricing to its customers on shelf edge labels and point-of-sale promotional material.
This means that Clubcard price promotions will not only show the total price of the product but also the unit price of the product (by volume or weight) to allow greater clarity and direct comparison of the price per unit between the Clubcard Prices offered and the price of alternative products.
This is good news for shoppers as it allows a consumer to easily and quickly distinguish if the price of Tesco Clubcard promotions is actually better value than buying a similar product from the range on offer. Previously, Tesco had only provided the unit price for products sold without Clubcard promotions, making it much harder for a consumer to see if a promoted price is actually good value or not.
What is the Tesco Clubcard?
The Tesco Clubcard is a loyalty program offered by Tesco (which is free to join). The Clubcard offers loyalty card members a reduced Clubcard price on selected products, which, in theory, will offer a discounted deal to a consumer, which is useful during increased food inflation and a cost of living crisis. It allows customers to earn points on their purchases at Tesco stores, as well as through certain Tesco Bank products and services. These points can then be redeemed for various rewards, including discounts on future purchases, vouchers for restaurants, cinemas, and other entertainment, as well as for experiences and travel.
What is a unit price?
Supermarket unit pricing, also known as unit price, involves indicating the cost of a product per standardised metric unit, such as per 100 grams or per 100 millilitres. This approach enables consumers to compare the relative value of different products by standardising the price based on a consistent metric unit.
For example, a bottle of shampoo costs £3.00 and contains 300ml, the unit price would be £1.00 per 100ml.
Unit pricing benefits consumers by providing a straightforward way to assess the true cost-effectiveness of various products, particularly when comparing different sizes or brands. It allows shoppers to quickly determine which option offers the best value for money, regardless of packaging size or branding.
By prominently displaying unit prices alongside regular prices on store shelves or labels, supermarkets empower consumers to make informed purchasing decisions. This transparency helps shoppers identify the most economical choices, and this can contribute to significant cost savings over time. Additionally, unit pricing promotes price competition among retailers, as it encourages them to offer competitive rates to attract budget-conscious consumers, which is good news for shoppers, as who doesn't want to get a good deal in their food shop?
A good scenario of how unit pricing is useful: A shopper goes into a store to buy a pack of cheese. They look at a Clucard-promoted pack of big-brand cheese, which is £2, reduced from £3.50. They then look at a pack of cheese from a different manufacturer, and it is £3.50, so the £2 pack looks to be the best deal, however, the more expensive cheese is actually a larger pack and is priced at £2.00 per 100g, the Clubcard pack of cheese, although only £2, is smaller and priced at £2.50 per 100g, and so the promoted product is actually more expensive when you look at the price per 100g, and so if you wanted to get the best unit price for that cheese, you'd go with the non-promoted product. You might not have enough money to buy the bigger pack, but at least you've now got the information you need to make an informed decision on which pack to buy for the best value per 100g, and it's this glaring omission of unit pricing until now, on Clubcard deals, that makes this change so important.
Why has this change come about?
Research into unit pricing, by Which? (for example, the price per 100g or 100ml) showed that 72% of people couldn't identify the cheapest fizzy drinks in a range of real-life examples. The consumer group Which? had previously called attention to Tesco’s unclear clubcard pricing, saying it could be considered a “misleading practice” under the Consumer Protection from Unfair Trading Regulations 2008, as it could make it unnecessarily difficult for shoppers to determine which product on the shelves is cheapest. Consumer champion Which? reported their findings to the UK competition watchdog, the Competition and Markets Authority (CMA), and in late July 2023, the CMA announced that it would clamp down on supermarket pricing and called on the government to reform unit pricing legislation and wrote to retailers not fully complying with the law asking them to make changes or risk enforcement action.
Tesco UK chief executive Jason Tarry has stated in a blog post that the change is something the grocer has been “planning to do for some time.” The CEO stated that over the coming weeks, these changes will appear in all our stores as our colleagues update millions of price labels on the shelf edge. We will also be adding these unit prices to our Clubcard Prices deals on the Tesco website.
As of 21st February, the new Clubcard price labels were visible on a number of Tesco's Clubcard offers at our local store.
Why is this can important change, and what are the benefits to the consumer?
This change means that Clubcard users will now be able to make an informed decision more easily and determine if the Clubcard promotion price is actually a better value than buying a different product. It's long been considered by shoppers that a Clubcard price is the best price available, especially for big-name, branded products; it now means that a shopper can much more easily determine if the cost per unit of the promoted product represents a saving over the unit price of a rival's product, or a Tesco own brand or budget product, giving the consumer a much better indication if a Clubcard special offer priced product, is the cheapest product available, and if not more easily switch to other products with a lower price point.
This change doesn't answer customers' questions as to why a customer needs to have a loyalty card to access cheaper prices. A common train of thought is that these lower prices should be available to anyone shopping in the store, not just to those customers who have signed up for a Clubcard, and so what difference does it make that someone has a loyalty card or not, if Tesco can afford to sell a product 25% cheaper because a customer has a loyalty card, someone without a card should be able to access the same level of pricing.
Many responses to this question on social media say that as the Clubcard is free, just get one; you can get one easily in-store and use it immediately, so what is the problem? Others are quick to point out that those customers, often elderly, who don't understand how loyalty schemes, loyalty cards and apps, work, and may actually be the type of customer who most need the cheaper pricing, but are missing out due to their lack of understanding; others state that they simply don't want their buying to be monitored by Tesco, (which is exactly what loyalty cards do), so don't use a loyalty card, and what products they buy are none of Tesco's business; they don't want their customer data to be able to be viewed/used/sold, which is a fair point!