Out-Law / Your Daily Need-To-Know

Online supermarket rapped for price claim errors

Out-Law News | 11 Jun 2009 | 2:47 pm | 2 min. read

Online supermarket Ocado could not back up price-matching claims made in its adverts, ad regulator the Advertising Standards Authority (ASA) has said. The company has been told not to repeat its claims while operating the current system.

Ocado used to price-match Waitrose, but last year changed its policy to match the cheaper prices at Tesco.com. Tesco complained to the ASA, though, that its claims in its adverts did not stand up.

Ocado claimed to be as cheap as Tesco.com, but Tesco said that it examined 3,811 items and found that Ocado was more expensive on 601 of them.

The ASA agreed that the advertising failed its rules on truthfulness, and that Ocado could not sufficiently back up its claims.

The ASA looked into the incredibly complex process of price-matching on the scale undertaken by Ocado and said that the company had tried to be fair, but that its systems and processes had let it down.

"We recognised the challenges that operating a robust price match policy could pose and we considered that Ocado had sought to implement the policy in a comprehensive way," it said. "We nevertheless considered that, while a small number of unavoidable discrepancies were to be expected when carrying out a price match policy on this scale, there were factors which meant that they were at risk of failing to price match a large number of items."

Ocado explained to the ASA that it 'scraped' Tesco.com's website once a week to determine item prices so that it could match them with its own products. It said that some of the errors occurred because Tesco.com used the wrong barcodes for some displayed items.

The ASA, though, said that regardless of Tesco's behaviour it was its own responsibility to live up to its claims.

"We noted Ocado believed Tesco had used incorrect or obsolete EAN [barcode] numbers which had caused a considerably large number of items to be omitted from the price match, particularly in the first two weeks of the policy," its ruling said. "While we recognised the difficulty that posed to Ocado, we considered that it was their responsibility to ensure that all products in common were appropriately price checked."

The ASA also said that Ocado’s methods of obtaining Tesco prices could mean that prices are out of date within a day. The company took prices from Tesco’s site in the early hours of the morning so as not to disrupt normal web traffic, but this meant that prices could fluctuate even on the day they were taken.

“Since Ocado carried out their scrape during the early morning of the price match day, Tesco could change their prices during the course of the day for some products, rendering Ocado's price match claim for those products for that day inaccurate. We noted this could apply to a large number of goods in common. We were concerned that there was potential for consumers to be misled, because Tesco could actually be cheaper later that day for a large number of products,” said the ASA. It added, though, that Ocado’s plans to include a time stamp as well as a date stamp on the comparisons would fix that problem.

“We concluded that, at the time the ads appeared, because a significant number of products had been omitted, Ocado's price match claim had not been substantiated,” said the ASA.