Coles, one of Australia’s largest supermarket chains, is facing accusations of misleading shoppers with its “Down Down” marketing campaign, a case currently being heard in the Federal Court. The Australian Competition and Consumer Commission (ACCC) alleges that Coles temporarily inflated prices on hundreds of products only to then offer them at a discounted “Down Down” price, creating the illusion of genuine savings.
The ACCC’s case centers on the claim that Coles’ marketing strategies deliberately misled consumers into believing they were receiving substantial discounts when, in many instances, the “Down Down” price was either the same as, or higher than, the price previously offered. ACCC legal counsel Garry Rich argued in court that Coles increased prices on at least 245 products before applying the “Down Down” promotion, effectively establishing a higher “was” price against which to measure the discount. “Your Honour will have noticed the repeated use of the words ‘Down Down’ and the phrase ‘prices are down,’” Mr. Rich told the court, as reported by the Australian Broadcasting Corporation. “Your Honour will also have noticed the big red hand… pushing prices down. And the message was not only that prices are down, but they’re staying down. Why on earth are you telling your customers the price is going down? They’re not.”
Evidence presented to the court includes pricing data for a range of products. Baby formula, for example, was consistently priced at $18 with a “Down Down” tag for over two years, from 2021 to March 2023. Coles then raised the price to $24 before briefly reverting to $21 with a new “Down Down” promotion, advertising a “was” price of $24. This meant customers were being presented with a discount from a price they had only recently paid, and which was higher than the price they had been paying for an extended period.
Similar patterns were identified with other grocery staples. A yoghurt product was sold for $6 for 461 days, then saw a price increase, followed by a “Down Down” price that was 70 cents higher than the original price. A $5 deodorant followed a similar trajectory, rising to $6.50 before being discounted to $6 under the “Down Down” banner. A 2-litre bottle of Coca-Cola, initially priced at $2.75 in 2021, experienced similar fluctuations, with a new “Down Down” price ultimately 27 per cent higher than the previous one.
The ACCC also highlighted Coles’ “Locked” promotion, which promised to maintain a price for a specific duration. An Arnott’s Shapes multi-pack, initially part of a “Down Down” promotion, saw a price increase before being offered on “Special,” then bouncing back up again before returning to a “Down Down” promotion at a price 50 cents higher than the original “Down Down” price.
Coles is defending the allegations, arguing that the discounts were genuine when considering various factors. Legal counsel for Coles, John Sheahan KC, stated in court that the ACCC had failed to establish a clear definition of a “regular” price and how long it should be maintained. Coles contends that the period examined by the ACCC – January 2021 to April 2023 – coincided with a period of significant global inflation, and that its pricing strategies reflected this economic reality. Mr. Sheahan also argued that the ACCC’s case was overly complex, relying on the assumption that average shoppers fully understand the intricacies of supermarket pricing and forecasting. “all prices are temporary. Nothing lasts forever,” Sheahan said, according to reporting by SBS Australia.
The Federal Court will ultimately determine whether Coles’ pricing and marketing practices were legal. Coles maintains it takes seriously offering accurate pricing and value to customers, particularly during a period of high cost of living. The outcome of the case could have significant implications for how supermarkets in Australia market their products and the level of transparency expected in promotional campaigns.
