PAK’nSAVE Mangere fined $78,000 for price discrepancies

Kennedy’s Foodcentre (2003) Limited trading as PAK’nSAVE Mangere has been fined $78,000 for discrepancies between the promotional price displayed or advertised and the price charged at the till.

It had earlier pleaded guilty to six charges of making false and/or misleading representations about price, under the Fair Trading Act 1986.

On six dates during June and October 2018, PAK’nSAVE Mangere charged a higher price at the checkout for one or more items than the promotional price advertised and/or displayed at the supermarket shelf. For example:

  • sliced salmon was displayed at $8.99 but charged at $10.79 on four occasions
  • mushrooms were displayed at $4.99 but charged at $6.99 on two occasions
  • avocados were displayed at three for $5 but charged at $1.99 each on one occasion.

Promotional pricing was advertised online via the PAK’nSAVE website (on a Mangere-specific webpage), and/or on price tickets and signs in-store.

The charges arose after Commission staff conducted mystery shops to check advertised prices against those charged at the till.

The price discrepancies identified by Commission staff were raised with customer service staff at PAK’nSAVE Mangere immediately following the mystery shops. Commission staff then returned the next day and re-purchased the products for which they had identified price discrepancies, to check whether the price discrepancies were still occurring. In some instances the discrepancies were still occurring.

In a written decision, Judge McNaughton in the Manukau District Court said the conduct “was repeatedly careless and not immediately rectified.”

“The pricing discrepancies related to a number of individual items across different departments of the supermarket and they were repeated, and the defendant did not immediately take steps to correct its pricing systems,” he said.

Once notified of the Commission’s investigation PAK’nSAVE Mangere took significant steps to remedy the problems “but the immediate failure to act was inexcusable” said Judge McNaughton.

For the Commission, Chair Anna Rawlings said “supermarkets manage thousands of different prices and they must ensure that their systems are sufficiently robust to ensure that consumers are charged the right price and are not misled, as they were in this case. Consumers should be able to trust that the price displayed on the shelf is the price they will be charged. If a mistake is made, businesses should ensure consumers are compensated and take immediate steps to ensure that the mistake is not repeated.”

“We agree with Judge McNaughton when he says that consumers are entitled to rely on an error free pricing integrity system and it is no defence to claim that error is somehow inherent in a business involving high volume, low value sales and regular changes in pricing,” said Ms Rawlings.

Background

The PAK’nSAVE brand is owned by Foodstuffs (NZ) Limited. Each PAK’nSAVE store is individually owned and operated. PAK’nSAVE Mangere is owned and operated by Kennedy’s Foodcentre (2003) Ltd.

Foodstuffs is jointly owned by Foodstuffs North Island Limited and Foodstuffs South Island Limited.

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