CSPI seeks more oversight of online grocery retailers’ marketing, urges more promotion of healthy food

By Elizabeth Crawford contact

- Last updated on GMT

Source: Getty
Source: Getty

Related tags: Cspi, Center for Science in the Public Interest, Online grocery, ecommerce, Marketing

After evaluating the ecommerce marketing strategies of six national retailers, the Center for Science in the Public Interest is urging federal regulators to control more tightly the types of products retailers can promote on their websites to better promote healthy options.

The public health advocacy group also urges the Federal Trade Commission and other researchers to examine online grocery retailers’ marketing practices, including how they use customer information and whether they clearly disclose product sponsorship.

These recommendations follow CSPI’s discovery in its new report, Scroll and Shop Food Marketing Migrates Online​, that more than half of food and beverage promotions on online grocery platforms are for unhealthy products, three-quarters of their email promotions were for unhealthy products and 58% of their search results featured unhealthy products.

The report, published this month, also recommends ways that retailers should redesign their ecommerce platforms “to support healthy eating, rather than undermine it.”

Unhealthy products featured predominately by online retailers

CSPI’s push for tougher oversight of online grocery retailers’ marketing strategies are based on a scan of food and beverage promotions, prices, search results, orders and delivery from six retailers in the Washington, DC, region, which CSPI evaluated for healthfulness based on the National Alliance for Nutrition and Activity Vending Standards and the Dietary Guidelines for Americans.

“Online grocery shopping has the potential to increase access to and consumption of healthy foods. However, we found that current retailer practices fail to support healthy eating,”​ CSPI explains in the report.

For example, CSPI found, “on average, customers were exposed to 30 promotions on a retailer’s home page, more than half of which were for unhealthy products. Customers received an average of 11 emails a month promotion foods and beverage, 76% of which pushed unhealthy options.”

In addition, CSPI found retailers offered heavier discounts for unhealthy products than healthy ones, with Peapod and Safeway offering discounts that were on average twice as great for unhealthy products. The center attributed this to trade promotion fees and noted that larger companies, which are more likely to produce unhealthy products, can afford to mark their items down more and more often.

“Farmers and smaller, better-for-you brands often have neither the market share nor the access to capital to make discounts viable. They cannot afford to pay trade fees while they struggle to sell products in a system designed for larger players,”​ CSPI explains in the report, adding, “The result is that the majority of food on sale is unhealthy.”

Price promotions for unhealthy items were compounded by how products were displayed in search results, CSPI argues in the report. It found that unhealthy items appeared in more than half of the top results for a search, which it again attributed to larger food and beverage companies’ ability to pay for prominent placement – a practice that is not always disclosed to consumers.

“Not all retailers divulge sponsorships,”​ but “disclosing sponsorships on grocery websites, in the same way search engines already do, would increase transparency for trade promotion fees and could support healthful eating,”​ CPSI argued.

It adds, “Failure to disclose sponsorships may deceive customers who expect that search results are based on relevance to a search query, not on a payment by a third party.”

CSPI calls on FTC to investigate

Based on what CSPI perceived as opaque sponsorship practices, the center called on the Federal Trade Commission to examine “online grocery retailers’ marketing practices, including targeted marketing practices that use purchase history, search history, and the customer’s race, income or address to inform website and email promotions.”

It also urges the commission to “investigate whether retailers clearly disclose product sponsorships,”​ and “bar retailers from sharing personal purchase and search history data with food manufacturers.”

CSPI urges increased regulatory oversight

The research results also spurred CSPI to recommend the US Department of Agriculture ensure online grocery websites promote healthy eating by leveraging their participation in the SNAP program, which is currently piloting allowing beneficiaries to buy groceries online.

CSPI argues that the pilot program may have “unintended consequences that … harm the people the program intends to serve”​ due to common marketing strategies employed by online retailers.

“The data privacy requirements in the SNAP pilot Request for Volunteers are limiting, focusing primarily on payment security standards. Limited privacy requirements coupled with sophisticated e-commerce marketing strategies may expose low-income families to new forms of targeted online marketing for food and drinks that are poor in nutrition and high in added sugars, salt and saturated fat,”​ CSPI explains.

But, it adds, USDA could develop policies and guidance for online SNAP retailers that require them to highlight healthy products on the home, search and checkout pages, and in emails. It also could require them to use price promotions to incentivize healthy products and more clearly communicate the price of a product substitutions or additional fees for weight-adjusted items, like produce.

Finally, it urges USDA to require retailers to disclose product sponsorships – a concern that CSPI places front and center of multiple stakeholders.

CSPI urges online grocery retailers to enact many of these recommendations without pressure for FTC or USDA. Find the full list of recommendations, and research results in the study available on CSPI’s website​.

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