Commerce Commission files 45 charges against Bunnings' 'lowest price guarantee'

Mark Wasley on 09/02/2017 - 20:40

Bunnings Warehouse are going to court over their 'misleading' 'lowest price guarantee'.

The Commerce Commission has filed 45 charges in the Auckland District Court against Bunnings (NZ) Limited alleging it misled consumers by advertising the prices of its goods as being the lowest in the market.

The Commission alleges that Bunnings' advertising at its stores nationwide along with advertising campaigns on television, radio, online, and in newspapers and catalogues gave an overall impression that it offered the lowest prices for its products, when this was not true.

Bunnings New Zealand general manager Jacqui Coombes said the company was "disappointed" with the Commission's decision to file charges.

"We disagree with the Commerce Commission's view of our lowest prices policy and will defend our highly competitive price guarantee," said Coombes in an emailed statement.

"We would like to reassure customers that we will continue our lowest prices policy along with our comprehensive business processes and procedures operating behind the scenes to back this up.

"We remain absolutely committed to creating more value for New Zealand consumers and believe in the right of all businesses to compete on price," said Coombes.

Each of the 45 offences has a maximum fine of $600,000, potentially totaling $27 million.

The case will be heard in court on March 7.

Is this fair on Bunnings? What do you Cheapies members think about this?

Sources: Commerce Commission press release, Newshub and BusinessDesk.

General Discussion

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Comments

  • wearnes on 09/02/2017 - 21:42
    +1

    Totally off topic, but its probably karma. How often do Bunnings end up in the news for mistreating their staff?

    Would be interesting to see more statistics on the products in question that the charges relate to and the margins of difference compared to other retailers…

    • footy7 on 09/02/2017 - 22:26
      +1

      Disgruntled Kiwi ex-employees ratting out on their Aussie boss, hey you are onto something…

      • wearnes on 10/02/2017 - 08:32
        +1

        Not sure about ex-employees, i was thinking of the ones that strike for higher pay, better rostering conditions, firing a disabled worker…

  • Hamster on 09/02/2017 - 22:49
    +1

    So the CC are stating that Bunnings are giving the impression that their prices on all their products are the lowest at all times? Then why would Bunnings advertise a 15℅ price guarantee if they could guarantee they always have the lowest prices?

    • nzmax on 10/02/2017 - 15:13
      +1

      Also how could a company ever know they had the lowest prices? Unless there is a lot more to this. This will be an interesting case. NZs already pay more for building materials, and B did bring in some much needed competition into the market. So I hope we don't see the end to these types of pricing matching promotions, as that isn't good for people who want to get a good deal.

      • Hamster on 10/02/2017 - 19:35

        And I'm guessing Bunnings is generally the lowest, but like you say,how can a company know they are the lowest all the time. Therefore having the price guarantee is like an insurance policy if someone does have a lower price.

      • Avantime on 11/02/2017 - 10:49

        The stuff from Bunnings is generally the cheapest for the DIYer, so there's not much to price beat. Also they have their own branded items and brand exclusives (as well as big name brands like Bosch making lower quality, cut price tools specifically for the retail chain) which makes it impossible to price beat. Occasionally however there are items you can price beat, which I have once on a Insinkerator waste disposal unit (price beat from Harvey Norman) - AFAIK they update their prices as soon as I triggered a price beat.

        The other chains like Mitre 10 and Placemakers can afford to charge more because they do a lot of contractor business, who can pass their costs to their customers. In return they get volume discounts, rebates and other goodies such as free rugby tickets for their "loyalty". This is quite evident if you have a look at the difference in foot traffic between neighbouring Bunnings and Mitre 10 stores, for example Manukau. In one Placemakers store I went to it was so dead that I thought I was the only customer in the whole store.

        • rkl on 11/02/2017 - 11:27

          This is bang on.
          Remember Placemakers comes under Fletcher too.

    • [Deactivated] on 10/02/2017 - 18:54

      I'm guessing its because they say "Lowest prices are just the beginning"?

    • footy7 on 10/02/2017 - 19:20

      If they guarantee lowest prices, then someone has to check that prices on all their products are the lowest on every single day.

      • Hamster on 10/02/2017 - 19:33

        Exactly, which is practically an impossible task. And I think that is why they have the 15% price guarantee, so that if someone's finds one lower they will beat it, either way they are in a sense guaranteeing the lowest price IF the consumer is informed of a lower price elsewhere.

        • footy7 on 14/02/2017 - 01:15

          Yes and that is a big IF. The majority of consumers simply do not have the time and effort to check if purchased item is the lowest priced. It is up to Bunnings to do that, no matter how impossible the task is (if you are claiming "Lowest Price Guarantee" in the first place). Bunnings has shot themselves in the foot for this, and they will pay (a hefty time) for their mistake.

        • nzmax on 14/02/2017 - 17:38

          I heard a story of one store who often had calls from another store to price match, they could tell this with caller ID, and they often gave out incorrect prices to the other store. Some stores who price match also require proof, such as a printout from a website or advert. I presume this is why some stores don't display their prices anywhere apart from instore so they are more difficult to price match.

  • wearnes on 21/04/2017 - 17:49

    Think they will still price match? Where once there was a policy today they only have a blank wall

    image

    • nzmax on 21/04/2017 - 18:34

      Its on their website.

      • wearnes on 21/04/2017 - 22:41

        Yeah, quips my interest though. wonder if they are just painting the building or if they are having a rethink.

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