Consumer NZ thanks the public for sharing dodgy supermarket pricing examples, leading to criminal charges

The advocacy group says this action relating to alleged inaccurate pricing and misleading specials is the result of people power.

The Commerce Commission has announced it will be filing criminal charges against Woolworths NZ, Pak’nSave Silverdale and Pak’nSave Mill Street for inaccurate pricing and misleading specials that may have breached the Fair Trading Act.

This action comes after Consumer shared over 600 pricing complaints from the public with the Commerce Commission, as the basis of a complaint alleging the supermarkets had breached the Fair Trading Act with their pricing and promotional practices.

Consumer chief executive Jon Duffy says that it is encouraging to see the Commerce Commission taking its highest level of enforcement action but warns this may not go far enough to prevent further misconduct.

"While we’re pleased that these cases will be heading to court, and there may be more on the way, we’re concerned that the financial penalties available under the current Fair Trading Act are not enough to deter the supermarkets from repeating this type of behaviour."

“This is evidenced by the previous $78k fine Pak’nSave Māngere received in October 2020 for misleading pricing that breached the Fair Trading Act," says Duffy.

Recent Consumer research found that 60% of supermarket customers noticed pricing inaccuracies while shopping.

Alarmingly, when people see a pricing discrepancy in store nearly 30% of people ignore it and move on (up from 23% in July 2023).

“It’s clear that more proactive measures are needed, as relying on rushed or confused consumers to raise complaints won’t reveal the full extent of the problem.

“This announcement comes just ahead of Christmas, a time when we know New Zealanders are under more financial strain and time pressure when shopping,” says Duffy.

While supermarket pricing errors may seem small on a case-by-case basis, Duffy says they become significant when multiplied across the wider population.

“Supermarkets have been aware of this problem for years but seem unwilling to fix it. On the flip side, they have been doing plenty of investing in marketing and loss prevention.”

Recent investments include Foodstuffs North Island’s foray into facial recognition technology, Woolworths’ major rebrand from Countdown and the establishment of its new loyalty programme Woolworths Everyday Rewards, as well as a failed attempt to merge Foodstuffs North Island and South Island and further consolidate the sector.

“Expensive marketing efforts shouldn’t be prioritised over being honest with customers in promotions and getting the basics of running a grocery business right,” says Duffy.

"The Commission’s first annual grocery sector report in 2024 highlighted that there has been no meaningful improvement in competition within the grocery sector in recent times."

The report demonstrates that the supermarkets’ retail prices have been increasing faster than the prices they pay to their suppliers.

“Many New Zealanders have been hit in the pocket by rising grocery prices over the last few years, in an already bleak economic climate.

"While today's announcement sends a strong signal that the Commission is willing to take action, we know that misleading pricing continues to be an ongoing issue to be addressed."

"We are calling on New Zealanders to be our eyes and ears again and to help us keep up the pressure."

Consumer is urging New Zealanders to report examples of misleading pricing at the supermarket on its website to help it continue to tackle the issue.

“We remain committed to holding supermarkets to account and restoring balance to the grocery sector,” Duffy says.