Lidl held to mislead consumers with cheesy price comparison

When looking at Lidl's price comparison ad, which compared a number of prices of products with Morrisons, the Advertising Standards Authority found that if a retailer knows their competitor is offering a price promotion on a product, it can’t use the competitor’s normal higher price to make the comparison. This applies even if the backdrop to a savings claim is a year-long price comparison.

The twist

Retailers must be careful when making price comparisons. Do not compare competitor products which you know are on promotion and clarify to the consumer which prices are being used when comparing items.

Why is this important for retailers?

This ruling illustrates the importance of clarifying to consumers the basis of price comparisons used in ads. Despite Lidl’s qualifying terms, the ad was not clear enough in portraying the differences between its own prices and Morrisons' prices.

The development

In January 2019, Lidl ran an ad which consisted of a picture of four different food items and stated “YOUR MONEY’S WORTH MORE AT LIDL” and “PRICES CRUNCHED ALL YEAR ROUND”. Text below the ad stipulated that the total price of the food in the image was “£11.50 at Morrisons” and “£9.77 (total) at Lidl”. Smaller text beneath this read: “Lidl prices correct at time of going to print… Morrisons prices checked at Morrisons.com on 16th January 2019. Excludes promotional pricing”.

Morrisons, who at the time of this ad had a discount on one of the products featured (a cheddar cheese), argued that the price comparison which Lidl made was not based on the current price available in its stores. Morrisons asserted that the ad was misleading and that Lidl could not substantiate its claim.

Digging deeper

Lidl admitted that it knew that Morrisons had a discount at the time that the ad was placed. However, it argued that the content of the ad indicated that the purpose was to illustrate that Lidl was generally cheaper than Morrisons throughout the year. They argued this by pointing to a number of features in the ad, including the two main headlines and the qualifying text that it excluded promotional pricing, which was in the same sized font and alongside the other qualification which stated when the Morrisons’ prices were checked.

Further, given their argument that their promotion was in relation to the price of goods throughout the year, Lidl contested that they had purposefully selected Morrisons’ higher price for the cheddar rather than the promotional price that had been applied when the ad was seen. In order to justify the selection of the price, Lidl also stated that the price used in the promotion had been applied to the product for longer and that Morrisons were likelier to charge this price to their customers over the year. Lidl confirmed that it had already resolved the issue with Morrisons and had agreed not to place the ad again.

The ASA found the following:

• consumers would understand that the ad was comparing the total price of the four products from Lidl against the same four products from Morrisons

• consumers would expect that the prices would be correct at the time that the ad was placed

• even though there was qualifying information which stated that it “excluded promotional pricing”, consumers would probably believe that none of the four products in the ad were subject to promotional pricing.

Therefore, the ASA came to the conclusion that consumers, on seeing the ad, would believe that buying the products at Lidl would save them money (£1.73).

The ASA, taking into account the fact the cheddar cheese was indeed on promotion at Morrisons on the day Lidl had checked the prices and was £1 less than what was featured on the ad, held that the ad was likely to mislead consumers (as the difference would have been £0.73).

The ASA instructed Lidl not to show the ad again and that future price comparisons should be clear and show the actual prices which were available to consumers.

Want more like this? This blog was adapted for retail from our snapshot series, bringing you a regular roundup of key legal developments for the modern commercial lawyer.