Coles Faces Court Over ‘Misleading’ Discount Practices

The Australian Competition and Consumer Commission (ACCC) is alleging that Coles engaged in misleading discount practices, inflating prices before offering temporary reductions under its “Down Down” promotion. The case, currently underway in the Federal Court, centers on claims that Coles misled shoppers with “illusory” discounts on hundreds of everyday items.

ACCC’s Allegations

The ACCC argues that Coles temporarily inflated prices on at least 245 products before applying discounts, a strategy known as “was/is” comparative pricing. The consumer watchdog contends that the promoted prices were often higher than, or equal to, previous regular prices. In many instances, Coles allegedly implemented temporary price spikes to establish a higher “was” price before offering a discount The Guardian.

Focus on Specific Products

The court has heard examples of alleged misleading pricing, including 1.2kg cans of Nature’s Gift wet dog food. Coles priced the dog food at $4 between April 18, 2022, and February 7, 2023, before increasing it to $6 for a seven-day period, then reducing it to $4.50 with a “Down Down” discount label. This price, however, was 50 cents higher than the price eight days prior ABC News.

Internal Concerns at Coles

Emails presented in court reveal internal discussions within Coles regarding the “Down Down” promotion. One email from February 10, 2023, showed a Coles manager seeking advice on competing with Woolworths’ pricing on the same dog food product. A response from the then-head of pricing and value, Chris Reid, cautioned against advertising the price as a “Down Down” special if it hadn’t been at the higher price for at least four weeks, stating it wouldn’t be “in the spirit of down down” Sydney Morning Herald.

Former Manager’s Testimony

Former Coles manager Paul Carroll, who oversaw the pet food category, defended the pricing strategy, stating he cared about customers and the prices they faced. He acknowledged that staff were encouraged to be competitive and that a lower price of $4.50 was permissible, even without the “Down Down” label ABC News.

Coles’ Defense

Coles is defending the ACCC’s allegations by arguing that the pricing changes were a response to increased costs from suppliers The Guardian. The court case is expected to last ten days.