Consumer watch-dog warns retailers may be pitching their sales close to the wind

Does it seem as if certain retail stores are forever having sales? Turns out they pretty much are.

Results of a new Consumer New Zealand study throw doubt on the authenticity of so-called slashed prices at least two high-profile retailers.

The watchdog monitored prices of eight products on sale at homeware giant Briscoes and Farmers department store over a 13-week period. All eight items were on special at least two-thirds of the time.

Two Farmers' products - the Philips Easy Speed Iron and the Remington Hair Dryer - remained on special for the entire 13 weeks.


"Was/now" pricing also raised eyebrows at Consumer, with "was" prices increasing on some products during the sale.

Consumer chief executive Suzanne Chetwin is concerned customers are not getting the bargains they thought they were.

"If what you're actually paying is the real price, what is a sale price?"

She didn't buy arguments from retailers that "was" prices were based on manufacturer's recommended retail prices.

"If it is the manufacturer's recommended retail price and nobody's selling it at that price, well it isn't the price, is it?"

Consumer would pass the study's findings to the Commerce Commission, Chetwin said.

Commerce Commission guidance on pricing stated products should be sold at the "was" price for a reasonable time before going on special, but what was reasonable depended on the circumstances, Consumer magazine reported.

Briscoe Group managing director Rod Duke said specials were never permanent.


"We'd be pulled up. The Commerce Commission are just a savage bunch of people and they are seriously on the plot."

"Was" prices were based on the manufacturer's recommended price and benchmarked against competitors, he said.

"It's very important to me that my first price is as good as the best price in the market, and often, better." One of the products tracked by Consumer magazine, a red Russell Hobbs sandwich press, was advertised only twice during the survey.

But it appeared on sale for nine out of 13 weeks because it was "caught up" in other storewide discounts, Duke said.

Other products monitored by Consumer would have been affected in the same way, he said.

Farmers did not respond to approaches by the Herald on Sunday.


Auckland University senior marketing lecturer Mike Lee said Farmers, Briscoes and outdoors apparel and equipment retailer Kathmandu were known for their ongoing sales and savvy consumers knew never to pay full price.

But the practice could also backfire because consumers learned to buy based on promotions rather than by brand loyalty.

"They end up switching from brand to brand and become fickle as the winds of sales promotions blow to and fro from competing brands."

The full results of the study are in this week's edition of Consumer magazine, and on Consumer's website.

Honour sale prices, watchdog urges retailer

Upset punters who lost out on cheap furniture after a botched Harvey Norman sale have complained to the Commerce Commission and Consumer NZ.

Both organisations confirmed they had complaints from shoppers, and Consumer boss Sue Chetwin blasted the retail giant for its poor response to customers.


The glitch occurred during Harvey Norman's "New Zealand's Biggest Retail Sale" on Thursday. Some furniture, including lounge suites, were mistakenly advertised online for less than $100. Nearly 330 people snapped up the deals but were later told by email that the prices were the result of a "genuine error".

Harvey Norman have said it will give customers a $100 voucher and a refund, but will not honour the sales.

But Chetwin said the company should do more. "Our view is that people have more rights than just getting a $100 voucher and their better option might be to complain to the Commerce Commission because this might be misleading advertising," Chetwin said.

"If people are happy to take the $100 voucher than that is what they should do but if they are not happy with that then we think they potentially have got more rights than what Harvey Norman are admitting to."

Chetwin said the retail giant was risking its reputation by not honouring the sale and it could make people think twice about shopping there. "I'm not a brand expert but I am a consumer and I just think to myself, if I have the choice of going to Harvey Norman, Noel Leeming or any one of the big-box retailers, I might think twice about going to Harvey Norman now for two reasons: one, because you might think you have bought something and you haven't, and two, are their sales really genuine?"

Chetwin said honouring the sales would ultimately make the company look good in the eyes of customers despite having made a huge mistake.


This is not the first time the retail giant has been in the spotlight. In 2005 the company was fined $16,000 for making misleading representations to consumers over a four-year interest-free deal that led to customers paying higher instalments than they expected.

- Additional reporting Regan Schoultz, NZME