Tesco PLC (LSE:TSCO) and J Sainsbury PLC (LSE:SBRY) ticked up on Wednesday after the UK’s competition watchdog said loyalty card schemes offered “genuine” savings.
A Competition and Markets Authority (CMA) review found there was “very little evidence” of supermarkets inflating prices to make loyalty promotions seem more attractive.
“Shoppers who are members of a loyalty scheme can almost always make a genuine saving on the usual price by buying loyalty priced products,” a statement said.
“This should give shoppers confidence that they are not being treated unfairly.”
Interim consumer protection executive director George Lusty noted the deep dive into 50,000 products had come against a backdrop of distrust over supermarket loyalty schemes.
“While these discounts are legitimate, our review has shown that loyalty prices aren’t always the cheapest option, so shopping around is still key,” Lusty added.
However, AJ Bell analyst Dan Coatsworth said the findings would offer “relief” that the regulator wasn’t “kicking up a fuss about loyalty schemes”.
“Companies like Tesco and Sainsbury’s have been going hard on loyalty schemes in a bid to attract more shoppers and as part of their fight against discounters Aldi and Lidl.
“Had the CMA found improper behaviour around loyalty promotions, it could have thrown a spanner in the works and derailed one of the main cogs in their operating strategy.”
Tesco climbed 1.2% on Wednesday, as Sainsbury’s gained 0.2%.