Kitchen retailers accused of 'yo-yo' pricing

Kitchen retailers are using 'yo-yo' pricing to make their products appear cheaper, according to a price comparison website.

Kitchen-compare.com tracked the prices of 32 different kitchens from major retailers and found that Homebase, Wickes, B&Q and Magnet have all used the trick this summer.

Homebase, for example, put up the price of its Hygena Sanvito Cream kichen at the end of May from £3,832 to £5,796 before dropping it to £2,849 a month later. Since then, the price has flucutated, with a low of £2,020 in August.

Similarly, Wickes raised the price of its New Jersey cream kitchen to £5,137 in June, before cutting it to £2,420.

"None of this is actually illegal - they use the higher price for the 28 days required by the Advertising Standards Authority," says Kitchen-compare.com managing director Steve Collinge. "But when they see these discounts, people need to ask 'is that really a genuine discount?'"

The apparent discounts are often tied to periods of peak demand: the last week in December and first week in January; Easter; and the August bank holiday period. "The key period is when people return after their summer holidays and think 'Christmas is approaching, and we need a new kitchen in place.'"

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What are the rules?

The regulations require retailers' price comparisons to be 'meaningful', which generally means that the old, higher price should have been made available for at least 28 days. The lower price shouldn't apply for so long as to make the comparison misleading, and prices shouldn't be compared with those from more than six months earlier. The retailer should have sold enough products at the higher price to make it clear that this was a real price.

However, there's enough leeway in these requirements for retailers to offer what look like amazing savings - but which may not actually be all that special.

Furniture retailers have long been known for their frequent discount periods - although many have tightened up their practices. Earlier this year, SCS, Carpetright, Dreams, Furniture Village and Homestyle's trading brands Harveys and Bensons for Beds all changed their pricing practices after an investigation from the Office of Fair Trading (OFT).

"Consumers should be able to trust that the price comparisons made by businesses are fair and meaningful and that the advertised 'savings' are genuine," says the OFT. It recommends that when customers see such claims, they should ask sales staff when and for how long the reference price was used, and how many sales they achieved at that price.

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