The Price Marking Order 2004 (PMO) has been under scrutiny recently.  Its rise up political agendas has come about as consumers have been shopping around and trading down in grocery and other shopping, as the cost of living has risen and they have tried to save money.

The PMO took effect in Great Britain in 2004.  Its aim was to provide greater transparency to consumers of the prices of goods.  Unless an exemption applies, the PMO requires that both the selling price and the unit price should be displayed in a way that is unambiguous, easily identifiable, and clearly legible. 

The spotlight was placed on the PMO in July 2023 when, as part of the Competition and Markets Authority’s investigation into unit pricing, the CMA recommended some changes to the PMO.  The CMA wanted to make the display of unit pricing more helpful to consumers including ensuring the PMO covered products which have more than one price due to price reductions and making the display of the pricing information clearer. 

The Department for Business and Trade (DBT) consulted on potential changes to the PMO in the Autumn of 2023 and published its conclusions in January 2024.  It confirmed that it would reform the PMO to make it simpler and easier to comply with, and to improve information transparency to benefit consumers.

The Price Marking (Amendment) Order 2024 was laid before Parliament on 23 October 2024 and amends the PMO. The changes to the PMO will come into effect on 1 October 2025.

What changes are being made?

• Mandates the consistency of units for unit pricing

The order makes amendments to the definition of “unit price” and revokes article 14 and Schedule 1 of the PMO to bring about consistency of units for unit pricing.  The changes mean, for example, that all products sold by weight would need to be priced per kilogram and all products sold by volume priced per litre.  

• Bolsters requirements on legibility

Amendments are made to article 7 of the PMO which deals with the presentation of the selling price and unit price.  The changes mean that the indication, in addition to it being “clearly legible”, must be displayed using a font which is clear and of reasonable size.

There is also a slight tweak to article 7 to ensure that as well as freight, delivery or postal charges having to be indicated, any taxes payable on them must be presented too.

• Ensures loyalty pricing is covered 

A new article 7A covers where a trader offers a product at more than one selling price, for example where there is a standard price and a price which applies to loyalty scheme members. The change means that in these circumstances the trader is required to show each selling price and unit price together with the conditions which need to be satisfied for the different prices to apply.  The CMA is due to publish a report on loyalty pricing in November.

• Deals with price reductions

Changes introduced to article 9 of the PMO will mean that traders must display any reduced selling price and the reduced unit price in the case of a general reduction.

• Carve out for “deposits” under Deposit Return Scheme

The order amends the PMO so that the selling price of products subject to the planned Deposit Return Scheme excludes the deposit.  In these circumstances, the deposit price should be clearly displayed separately.  This would be relevant, for example, when a consumer buys a drink in a container that is the scope of the scheme, and the deposit can then be redeemed when the empty container is returned.   

What didn’t make it in?

The DBT concluded that there was a need to improve legibility of price labels, and agreeing minimum font sizes for selling prices and unit prices was on the table. This level of detail is not covered in the new regulations, although it may yet follow in the form of guidance.

During the DBT consultation process there was debate about the exemption which applies where a shop’s floor area does not exceed 280 square meters, which aims to minimise the burden of regulation on the smallest businesses.  Alternative thresholds were put forward but having considered consultation responses, DBT took the view that there wasn’t a compelling case to justify any change to the current wording.

CMA interest in unit pricing 

The CMA has already shown considerable interest in unit pricing.  In July 2023, the CMA published an open letter to grocery retailers on the use of unit pricing, identifying various practices which it thought were problematic and may prevent shoppers from carrying out meaningful comparisons across products.  It warned retailers to review their practices.

The CMA also carried out consumer research and unit pricing analysis at the beginning of 2024. This reinforced the value of unit pricing for shoppers when comparing products. 

This matters for our clients. The CMA’s attention to this area is particularly significant given the fast-approaching direct consumer enforcement powers that the CMA will gain in the spring of 2025, including the ability to issue financial penalties to traders breaching consumer law.  The CMA’s new super powers only add further incentive for you to get to grips with the changes to the PMO, before they come into effect in October next year.