Down, Down, prices not actually down, court finds in Coles case
Key takeaways
- A federal court judge has ruled in favour of the ACCC and found that Coles misled shoppers with its "Down, Down" discounts.
- Coles temporarily increased prices on 245 products and then discounted them as part of the promotion. The discounts still priced the items above their original prices.
- What's next: Coles will likely pay a fine, and while consumers don't directly gain a benefit we may see big supermarkets take more care with discount pricing.
A federal court justice has ruled today that Coles did in fact mislead shoppers with its "Down Down" pricing promotions.
This is a win for shoppers and the Australian Competition and Consumer Commission (ACCC), which initiated the case.
How did the pricing mislead shoppers?
The ACCC alleged that Coles was doing something many shoppers had long suspected: offering promotional discounts that weren't really discounts.
The consumer watchdog accused Coles of temporarily raising prices on a product, then discounting the product back to a price that was either identical to the original price or slightly higher.
The court agreed, finding that the supermarket giant "engaged in misleading and deceptive conduct, and made false or misleading representations" with the pricing of 245 products in a period between February 2022 and May 2023.
Justice Michael O'Bryan examined 14 examples of product prices and found that in 13 of them Coles had contravened Australian Consumer Law.
79% of Australians believe supermarkets are price gouging, according to Finder research. The ACCC has another case against Woolworths underway with a similar allegation.
Where does this leave supermarket shoppers?
The ACCC's win today is good news for consumers. Big retailers will be a lot more careful in how they display promotional prices.
Justice O'Bryan determined that the "Was" price, which Coles used as a base before applying a discount, should be stable for 12 weeks before an ordinary shopper would consider the discount to be genuine.
The ruling today makes it harder for big retailers to raise prices artificially for a short period in order to claim false discounts.
This will hopefully lead to more transparency and allow shoppers to make more informed decisions without being lured in by false discounts
Shoppers need to be on their toes
The case highlights the complexities around supermarket pricing. Inflation has made everything more expensive.
No doubt there are plenty of examples where supermarkets do legitimately raise base prices for items as costs rise.
It's hard for shoppers to know what is and isn't a good deal.
The best thing any shopper can do is have a budget for groceries and try and stick to it. It's a good idea to be aware of what the most expensive items in your weekly grocery shop are, and shop around between stores if possible.
And when you see a big flashing price discount, make sure you stop and consider if the price still seems like a good deal to you.
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