Consumer power exposes ‘zombie’ discounts

Those “down down” and “prices dropped” marketing campaigns by Coles and Woolworths have always seemed doubtful to skeptical consumers battling rising living costs. 

It’s fair to say the good folk at the Australian Competition and Consumer Commission (ACCC), which regulates the nation’s competition, consumer, fair trading, and product safety, also do their weekend shopping in supermarkets and, as they walk the aisles, cast a skeptical and professional eye over the claimed price reductions. 

Now the ACCC has decided to take Woolworths and Coles to court, claiming they have misled us with their pricing promises.  

The ACCC’s allegations relate to products sold by Woolworths and Coles at regular long-term prices which remained the same, excluding short-term specials, for at least six months and, in many cases, for at least a year. 

The products were then subject to price rises of at least 15% for brief periods, before being placed in Woolworths’ “Prices Dropped” promotion or Coles’ “Down Down” promotion, at prices lower than during the price spike but higher than, or the same as, the regular price that applied before the price spike. 

“Following many years of marketing campaigns by Woolworths and Coles, Australian consumers have come to understand that the ‘Prices Dropped’ and ‘Down Down’ promotions relate to a sustained reduction in the regular prices of supermarket products,” ACCC Chair Gina Cass-Gottlieb said. 

“However, in the case of these products, we allege the new ‘Prices Dropped’ and ‘Down Down’ promotional prices were actually higher than, or the same as, the previous regular price.”  

Consumer advocate, CHOICE, has welcomed the ACCC’s action saying the supermarkets “have been playing tricks with pricing in recent years”. 

CHOICE "smelled a rat” back in 2023 when it awarded Woolworths and Coles its Shonky award after detecting widespread consumer distrust.  

“We know from our extensive work in this area that promotional labels at the major supermarkets often confuse shoppers, and the frequent changes in prices make it difficult to tell whether there is a genuine discount or not,” CHOICE director of campaigns, Rosie Thomas, said. 

CHOICE is calling for greater transparency of historical supermarket pricing data. 

“Easier access to data on supermarket price changes over time would have made it much harder for the supermarkets to get away with this kind of behaviour for so long,” Ms Thomas said. 

The ACCC is seeking penalties in this case, as well as community service orders requiring both supermarkets to fund a registered charity to deliver meals to Australians in need, in addition to any pre-existing programs. 

“We allege these misleading claims about illusory discounts diminished the ability of consumers to make informed choices about what products to buy, and where,” Ms Cass-Gottlieb said.