Frasers Group (FRAS) has been publicly censured by the UK’s advertising watchdog after a Sports Direct promotion was found to mislead shoppers over the true value of a discount.
The Advertising Standards Authority banned an online advert for a Puma zipped baselayer top sold through Sports Direct, which is owned by Frasers Group.
The ad listed the top at £17 while claiming a recommended retail price of £45, a comparison the ASA said could not be adequately substantiated.
The regulator ruled that Frasers could not provide sufficient evidence the product was “generally sold across the market” at the stated £45 RRP.
Frasers argued the item had previously sold for that price on Puma’s own website until April 2024 and was available through a third-party seller for £43.94.
However, the ASA found listings for the same top priced at £17 on another Frasers-owned retail platform, and at £23 through a separate sporting goods website.
Shoppers “expect the RRP to be a genuine selling price and to be able to make a saving against that price,” the ASA ruled in its formal judgment.
The ruling arrives just days after Frasers Group finance chief Chris Wootton wrote a strongly worded letter to the regulator’s chair attacking the crackdown on so-called fake discounts.
Wootton argued that the ASA’s approach had created “unreasonable and we say unlawful barriers in the way of vigorous price competition in the market.”
“At a time when the cost of living crisis is rightly at the forefront of public concerns, it seems extraordinary that the ASA seems intent on making it harder for traders to promote genuine price discounts to consumers,” he said.
Wootton also contended that modern shoppers are “savvy” enough to “carry out price comparisons at the touch of a button on their phones,” suggesting consumers can judge discount value for themselves.
Frasers has claimed the ASA’s requirement that RRPs reflect prices at which products are “generally sold in the market” has no basis in law.
“This test is unacceptably vague, and makes it very difficult for traders to know whether use of an RRP will be permissible,” Wootton stated in his letter.
Frasers Group has vowed to contest the ruling, describing it as “fundamentally wrong” and accusing the regulator of choosing to ignore evidence it submitted.
A spokesperson said: “We do not accept that it is the valid legal test for whether an RRP is misleading or not, or that it reflects consumers’ understanding of RRPs, which have been around for many decades.”
The spokesperson added that applying the ASA’s market-wide data test is “unworkable in practice for traders, having to compile data from ‘across the market’ in order to establish each and every RRP they use.”
The retail group said it remained “focused on ensuring our customers get the best possible value during this cost-of-living crisis.”
Frasers Group was originally founded as Sports Direct International by billionaire Mike Ashley in 1982, built on a reputation for selling sportswear at heavily discounted prices.
Ashley subsequently led the business into luxury retail, including acquiring a stake in German fashion house Hugo Boss and purchasing the Harvey Nichols department store chain.