Customers tricked by Yo-Yo pricing on kitchens

• Stores set artificially high prices on some products for short periods 
• This makes other items, such as kitchens, seem even cheaper
• Price comparison website finds that four major firms use the pricing ploy

Big chains are using ‘yo-yo’ pricing to fool customers into thinking they are getting a bargain kitchen, an investigation shows.

The stores set artificially high prices for short periods in order to boast that their lower prices the rest of the time are cheap.

A price comparison website found that Homebase, Wickes, B&Q, and Magnet all use the ‘reference pricing’ ploy.

Steve Collinge of kitchen-compare.com said: ‘Many consumers are naive about the industry practices and often are attracted by the high discounts.

‘The more cynical approach taken by some retailers is to “price establish” their kitchens at a higher price for the legally required 28 days and then run a high discount promotion – 60 per cent or more – for a period of up to six months.

‘It is clearly a dirty trick and something that consumers need to be aware of.’

Mr Collinge’s figures show that Magnet created a high benchmark price for its popular gloss kitchen in June by putting it up to £9,064 for one month and then up to £9,786 for one day on July 1. The price then came down during a series of promotions to as low as £4,448.

Homebase has a list price of £6,343 for one of its cream kitchens but it has not been sold at that price since April 1.

The price has ranged between £2,020 and £3,832, except in June, when it was £5,796.

Wickes raised the price of its New Jersey cream kitchen to £5,137 in June, before cutting it to £2,420 and then pushing it back up again in recent weeks. B&Q admitted it had used the pricing strategy but said it would end the practice.

‘We have responded to customers who have said they want to choose the kitchen that best suits their home and their lifestyle, without feeling pressured into mistakes by time limited offers and deals,’ a spokesman said. 

In theory a product should have been at the higher price for at least 28 days, while the subsequent sale should not run for any longer than it was available at the higher price.

However there are various get-out clauses and the rule is rarely enforced.

Magnet said: ‘We fully adhere to the industry guidelines surrounding pricing and promotion policies and run genuine offers to give consumers the best choice and value.’

Homebase said: ‘We always offer competitive prices and genuine promotions to customers, which adhere to legal guidelines.

‘We offer customers reassurance by price-matching any like-for-like kitchen, plus 10 per cent of the difference.’

Wickes did not respond to requests for a comment.

Source: Sean Poulter - Daily Mail

Read the full news article here