Tesco said the sample of products used in the Guardian investigation was 'skewed and unrepresentative'. Photograph: Troika
Supermarket giants Tesco and Asda dramatically increased prices on key items in the runup to Christmas in what an independent expert has called "a systematic, cynical and aggressive attempt to exploit demand", a Guardian investigation can reveal. Batteries, lightbulbs, medicines, Christmas drinks and must-have children's toys were among essentials whose prices were increased.
Both companies ran marketing campaigns before Christmas and at New Year boasting of thousands of price cuts but many consumers will have been unaware that they were also raising thousands of prices in the same period.
Data acquired from third party analysts and published on our website shows that between 9 and 22 December 2009, Asda increased prices on more than 2,000 lines while Tesco upped the price of over 1,500 lines. Professor John Bridgeman, the former director general of the Office of Fair Trading who conducted official inquiries into the supermarket sector, said that in his view the data showed "a cynical attempt to exploit demand in the week before Christmas and force prices up" and "extract maximum profit" from shoppers who were too busy to go elsewhere.
In Asda products that doubled or nearly doubled in price immediately before Christmas included a four-pack of Duracell Plus AA batteries, certain razor blades, gravy pouches, Lemsip, toothbrushes and pickles; Walkers Sensations crisps went up 45%, a 1.25-litre family bottle of Coca Cola went up 37%. In Tesco Nurofen was up 33%, a pack of Warburton's teacakes up 34.4%, a bottle of Beefeater gin was up 37.6% and various lightbulbs were up over 20%, for example. The must-have toy for girls, the Peppa Pig playset, went up 50% from £19.97 to £29.97 on 19 December.
The two retailers did not challenge the accuracy of the figures we put to them, but rejected Bridgeman's interpretation. They said the majority of the increases we have identified were on products that were coming off promotion. Bridgeman described ending advertised promotional discounts in the busiest week of the year as "cynical". Consumers did not expect promotions to end the week before Christmas, he said, and the rises would exploit the less well-off most as they have to manage budgets very carefully and shop week by week.
"There was no warning that the week or two before Christmas the retailers would aggressively raise certain prices. It's a cynical abuse of the busy shopper," he said.
The prices in our tables were taken from the grocers' online stores, which they say reflect the national pricing policies in their shops. The number of price rises in the period we analysed appeared high, affecting around 6% of lines in Tesco and about 9% of those in Asda. Bridgeman, who is now an international consumer consultant on supermarkets, said the constant churn in prices both up and down had made it virtually impossible for consumers to shop on price and most people had given up.
Both supermarkets, according to Bridgeman, would be able to use their sales data or information from loyalty cards to identify those purchases customers feel they have to make at Christmas and then target these categories for some steep rises "to extract maximum profit" from shoppers who have neither the time nor capacity to go elsewhere. So household cleaning goods, shaving products, toiletries, lightbulbs, batteries, pickles, sauces, herbs and spices typically consumed at Christmas, favourite seasonal drinks, hangover and indigestion pills, and must-have family presents were all categories seeing dramatic hikes on some lines.
Asda said: "The vast majority of products [that went up] were four-week promotions that simply reverted back to their original low price. Our customers know they don't just have to take our word for it. All of our prices are online and independently verified by MySupermarket.com, which proves that Asda had more low prices every single week in 2009 compared to any other supermarket."
Tesco said: "The suggestion that we had a policy of forcing prices up for customers in the runup to Christmas is totally wrong. The Guardian has used a skewed and unrepresentative sample of products to make a series of partial and misleading accusations which misrepresent Tesco and the highly competitive market in which we operate."
It also said it did not use data from its Clubcard in the manner suggested by Bridgeman. "In fact we cut the prices of hundreds of our most popular Christmas lines." Tesco said the price rises we had identified changed "as promotions ended, as supplier costs increased, or changed in line with the market". In the runup to Christmas it says it cut the price of 2,638 products and as some promotions ended, others not identified in our data began. Its promotions are advertised using various methods, including shelf-edge labelling and the dates on which promotions end are included, it told us.
Bridgeman estimated that the price rises in Tesco "had probably added around £15 per £100 spent to baskets for many households" but said that there was currently no useful week-by-week comparison available on a representative £100 basket of both food and non-food goods bought in the major UK supermarkets.
The Guardian investigation was an important contribution to understanding supermarket price volatility which was of vital interest to Britain's consumers, he said. Tesco did not respond specifically to Bridgeman's figure of £15 per £100 spent this year, but said it was misleading. "The average Tesco basket spend was lower in every week in the runup to Christmas this year than last year. In December our overall food inflation was 0.14%. This compares to 0.74% in November and a six-month average of 0.12%."
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