Retail: OFT ends investigation after furniture and carpet firms agree to change pricing practices

Five carpet and furniture retailers have agreed to amend their pricing practrices, following an investigation by the Office of Fair Trading. Five carpet and furniture retailers have agreed to amend their pricing practrices, following an investigation by the Office of Fair Trading.

Friday, March 21, 2014
10:01 AM

Five furniture and carpet retailers have changed their pricing practices following an investigation into the way discounts are advertised.

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The Office of Fair Trading (OFT) said today that it has closed its investigation after SCS, Carpetright, Dreams, Furniture Village and Homestyle’s trading brands Harveys and Bensons for Beds confirmed their commitment to using genuine prices.

The inquiry looked into the reference prices used by retailers to advertise a bargain to shoppers, such as “Was £800, Now Half Price £400”.

The OFT said the retailers confirmed their commitment to using genuine reference prices and, without any admission of liability, made changes to their reference pricing practices.

The regulator did not give specific examples but said the higher price was unlikely to be genuine or fair if a product was only available to buy at a higher price in a limited number of stores, the discounted price was used for significantly longer than the higher price or if relatively low volumes of a product were sold at the higher price.

OFT director Gaucho Rasmussen said: “Retailers advertise bargains and discounts by referring to a previous or future higher price.

“It’s a powerful marketing tool which, when used properly, provides a helpful and easy way to demonstrate to shoppers the value of discounts and savings.”

The Competition and Markets Authority (CMA), which succeeds the OFT next month, has pledged to continue to monitor pricing practices within the sector to check whether businesses are complying with their legal obligations.

CMA chief executive Alex Chisholm said: “Companies are advised to satisfy themselves that their practices are in line with the law because failure to do so could risk enforcement action.”

Carpetright chairman Lord Harris said: “We are pleased the OFT has publicly welcomed Carpetright’s commitment to open and transparent pricing.”

1 comment

  • Devastated by this decision, had these companies been smaller family firms they would have been prosecuted and fined. The OFT has already stated what they were doing was illegal yet they get away with it. Whilst blatantly flouting the law they have caused many smaller family firms to close down due to their misleading pricing structures which smaller companies cannot compete even if they wanted to. It is a sad day when independent traders are let down by government bodies in such a manner, these companies should fined pro-rata to the damage they have caused smaller traders in the past which if implemented would force them out of business to the overall benefit of all consumers.

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    Peter

    Friday, March 21, 2014

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