Pure-plays escaping price scrutiny, furniture store chiefs fear

They say bricks-and-mortar furniture retailers are unfairly policed while pure-plays are allowed to operate in a Wild West trading environment.

Angry retail chiefs criticised the OFT’s investigation into pricing practices in the furniture and flooring sector for focusing only on retailers with stores. They said an “uneven playing field” was being created and that pure-play retailers can undercut those with stores because they do not have to adhere to the same promotional restrictions.

Dreams chief executive Mike Logue told Retail Week: “We’re looking for a level playing field and it feels like there’s a marked difference between the high street and online.”

One leading furniture boss said: “It’s important to have a level playing field. It’s very dangerous if you have people in the same market able to do things others cannot.”

Another furniture chief warned that the imbalance could result in job cuts and even companies going out of business.

He said: “It’s impacting companies with tens of thousands of employees. No web-only traders have been challenged. Where our sales have gone in the last year are places online where there don’t seem to be any rules. We’ll find a way – we’ll cut costs, cut people.”

The OFT, which is being absorbed into the new Competition and Markets Authority next week, last summer launched an investigation into furniture and flooring retailers over concerns around reference prices and discounts.

The OFT has now ended its investigation into Carpetright, ScS, Dreams, Harveys, Bensons for Beds and Furniture Village. It said last week the retailers “confirmed their commitment to using genuine reference prices and, without any admission of liability, have made changes to their reference pricing practices”.

An investigation into DFS closed in December.

The OFT said from now on it would take “enforcement action” against any retailer found using promotional tactics it judges unfair.

OFT director, goods and consumer group, Gaucho Rasmussen insisted the OFT was treating all retailers in the same way. He said the investigation was focused on retailers that it had evidence against and that the OFT does not have the resources to investigate every potential breach of best practice.

“We focused on the largest players but the rules apply to online retailers as much as they do anyone else,” he maintained. Rasmussen added the results of the investigation affected the whole retail sector. “We encourage everyone across the retail sector to take note,” he said. “Everybody’s now on notice.”

One furniture boss said he would be “watching like a hawk” to ensure retailers, regardless of channel, are treated equally.