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The ‘bogus bargains’ scandal shows how big supermarkets treat us like fools

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I nearly spat out my “special-offer” cornflakes this morning when I read the news that supermarkets have been accused of offering bogus bargains and costing shoppers hundreds of millions of pounds.

Of course, like practically everyone else, I know full well that stores like Tesco, Asda, Sainsbury’s and Morrisons use pricing tricks to rip off customers.

Yet these new allegations by Which? – that will now force the regulators to investigate - still stuck in my craw.

Under the spotlight are “was/now” promotions, multi-buys and so-called shrinkflation, when the packaging and not the price shrinks.

In the first case, Which? gave the example of a Nestle Kit Kat Chunky Collection Giant Easter Egg, which was advertised by Ocado at £7.49 for just ten days in January, but was then sold “on offer” at £5 for 51 days.

On the multi-buy front, it revealed how Asda increased the price of a Chicago Town Four Cheese Pizza two-pack from £1.50 to £2 when it introduced a two-for-£3 deal.

Meanwhile, Tesco sold a multi-pack of six cans of Green Giant Original Sweetcorn for £3.56, while the tins were actually cheaper when bought as a pack of four for £2.

And it claimed that supermarkets do not cut prices when firms shrink packaging, such as when PG Tips reduced the weight of tea in an 80-bag box from 250g to 232g.

The consumer group also highlighted the how of 40% of groceries are sold on promotion – which is probably the biggest clue that they’re not all special offers.

The big supermarkets are treating us like fools.

Of course, they have to be sneakier than furniture stores since, unlike sofas, we buy food frequently and have a better sense of what is a reasonable price.

But, nevertheless, we know we’re often being tricked into buying more than we need, that discounts are not all that they seem and that “on-special” items may not actually be the best value in the range.

Yet having to scrutinise every price and weight to figure out the true cost - and having to remember what the cost used to be is exhausting.

We lead busy lives and so shoppers often pick up “bargains” knowing that it’s probably too good to be true, but also not wanting to be cheated out of a deal if there really is one.

It’s no wonder that trade is booming at the more straightforwardly-priced hard discounters Lidl and Aldi – despite their stores having cramped, rat’s maze layouts, frequently miserable staff and a singularly inattentive and rushed checkout system.

Following its probe, Which? has used its legal powers to launch a super-complaint that will force the Competition & Markets Authority regulators to investigate.

This could lead to new laws into the way prices and offers are presented at the big retailers, but I wouldn’t bet on it.

Our toothless regulators should have long ago investigated, but the fact that Which? have resorted to forcing them tells us that they have little appetite for clamping down.

Sure, Tesco was fined £300,000 in 2013 over a bogus half-price strawberry promotion, but this was just a token gesture.

And this meekness in the face of the big businesses they claim to keep a watch over is endemic with all our regulators.

For example are we really to believe that energy companies have not been making excessive profits when, British Gas has seen the value of its shares rise 12-fold since privatisation 29 years ago, while the wider stock market has risen barely four-fold.

Just for the sake of reference here, if you’d bought 100 British Gas shares for £135 in 1986 and kept them, they would today be split into 100 Centrica shares worth £258, 84 BG ones with a value of £1,003 and 31 National Grid shares worth £304 - and this totals £1,565.

On top of that, you would have received a nice annual dividend that has been guaranteed at least 2% above the rate of inflation – something most other firms are not able to do.

And, since we were talking about supermarkets, it is worth noting that, despite serious troubles in recent years, Tesco’s shares are still worth 44% more than they were a decade ago.

Assuming the average cash ISA savings rate over this period was 3% and not counting all the dividends you’d have received, Tesco shares would still have been a better bet than the bank

But I digress. What I am trying to say is, when utilities and supermarkets are turned into naked cash cows for shareholders, it’s clear regulators do little to protect consumer interest.

Yet we have enabled this through a culture of mind-blowing deference to the business elite, who repeatedly tell us that “what’s good for business is good for Britain”.

This flawed logic assumes “business” is a single entity. Whereas, in fact, it is many things: shareholders, directors, management, staff and customers.

And if we can accept the premise that all these interests do not always intersect, we can also accept that ensuring shareholders – 40% of whom are foreign investors - are always richly rewarded in the short-term is not necessarily in Britain’s interest either.

We have the power to hold businesses fully to account to ensure that they act responsibly and in Britain’s interest, yet we prefer light-touch regulation where shareholders are allowed reign supreme and trample over everyone else.

It is this narrow self-interest that has allowed firms to shrug investment and gives Britain the unique distinction of being the only G7 country that has failed to raise productivity beyond its pre-crisis peak - and has been forced to plug the gap with low wages.

All this can change. Supermarkets don’t have to rip us off. Firms can focus on customers and investment a lot more than they currently do. And regulators can have teeth.

We just have to stop being in such thrall to a craven, wealthy elite and instead put the long-term interests of the majority first.