We recently wrote about the UK's government's plans for a new consultation on pricing claims. The ASA's latest pricing ruling may further contribute to retailers having sleepless nights. It upheld a complaint about claims that consumers could "Save up to 65%" as part of a purported "price drop", finding that the basis of the savings claim was unclear and materially misleading.
Nectar Sleep Ltd's website homepage featured prominent messaging including: "THE NECTAR PRICE DROP IS HERE. Our lowest prices ever. Save up to 65%" and saying "Savings compared to Similar Brands Avg Prices".
Simba Sleep challenged if the basis of the "Similar Brands Avg Prices" comparison was sufficiently clear and whether the associated savings claims were misleading.
Nectar Sleep tries to cushion the blow
Nectar Sleep argued that the savings claims were not comparing current prices against Nectar Sleep's own usual selling prices. Instead, they were based on a comparison between Nectar Sleep products and the average price of comparable competitor products. The company had calculated a "Similar Brands Average Price" using three comparable products from competing brands and compared Nectar's prices against that average. Nectar Sleep also explained that consumers could access a webpage setting out the methodology and identifying the products used for the comparison.
Notably, Nectar Sleep stated that the "Save up to 65%" claim had appeared because of an administrative error and that a lower figure was intended. This argument carried no weight with the ASA; a reminder that advertisers bear responsibility for the claims they publish, regardless of how those claims came to appear.
Dream on, says the ASA
The ASA said that the key issue was one of consumer understanding. It said that consumers encountering statements such as "price drop", "lowest prices ever" and "save up to 65%" would naturally assume they were looking at a traditional sale, with savings being measured against Nectar Sleep's own usual selling prices.
Although Nectar Sleep included the phrase "Savings compared to Similar Brands Avg Prices", the ASA considered that most consumers would not be familiar with that term or understand how it had been calculated.
Flawed comparators and inflated savings
The ASA also took issue with the construction of the comparator itself. The "Similar Brands Average Price" was derived from only three competing products selected by Nectar Sleep. The ASA considered that consumers would be likely to understand an "average price" claim as reflecting a broader cross-section of the market rather than a narrow selection chosen by the advertiser.
It considered that because the Similar Brands Average Price was based on an average, and consumers could not purchase a competing product at that price, the claimed 65% saving was not based on an established, genuinely available reference price.
The ASA was also critical of the methodology used to derive the headline "up to 65%" claim. Rather than identifying a particular product against which consumers could achieve a 65% saving, Nectar Sleep calculated average savings across its mattress range and used that figure as the basis for the headline claim. The evidence showed that the highest savings levels applied only to certain memory foam mattresses, while savings on other products were considerably lower. The ASA concluded that the claim exaggerated the savings consumers were likely to obtain.
Therefore, the ad breached the rules in the CAP about misleading advertising, substantiation and pricing claims.
No rest for the non-compliant
With the government consulting on pricing claims later this year, the decision is a timely reminder that advertisers need more than a comfortable methodology to support savings claims. In practical terms, advertisers relying on competitor price comparisons should ensure they use a genuinely representative sample of the market, make the basis of the comparison prominent and intelligible to consumers, and verify that "up to" claims are achievable on identifiable products. When it comes to price comparisons, the ASA expects businesses to be able to show that consumers are not being sold a dream.
