Australia’s two major supermarkets have been named and shamed for “cashing in during a cost-of-living crisis” by consumer advocates Choice. Coles and Woolworths were among the recipients of Choice’s Shonky awards, an annual list that recognises the worst products and services of the year.
“While Coles and Woolies have been promoting how they’re supposedly helping with the cost of living, in the background they’ve been banking huge profits,” the Choice chief executive, Alan Kirkland, said.
“Frequent changes in prices mean it’s hard to tell if you’re even getting a genuine discount.”
The supermarket giants were joined on Choice’s ignominious list by a rental platform that the consumer group claims put desperate house hunters at risk, a retailer it says tricks customers into a $99 subscription and a mini-fridge it says doesn’t actually cool things.
There are many reasons why a business can be named among the worst of the worst and receive a Shonky award. In some cases it is profiting in what Choice says is an unfair way, Kirkland said.
The supermarkets each recorded more than a billion dollars in profit this year and “people are questioning whether that’s justified”, he said. An overwhelming majority of shoppers (60%) believe the supermarkets are “making a lot of money from the price hikes”, according to a Choice survey conducted in September, while less than 20% think Coles and Woolworths are doing enough to keep prices low.
At the same time, 88% of consumers surveyed were worried about the cost of food and groceries – a stark increase from 2021, when the number was 56%.
What it comes down to is “Coles and Woolies putting their own interests, and the interests of their profits, ahead of the interests of their customers”, Kirkland said. “They are well and truly deserving of a Shonky award.”
A Woolworths spokesperson said the supermarket was “acutely aware” of the pressure on Australian families through cost of living increases
The spokesperson pointed to several initiatives that offered lower prices for customers on thousands of products on a weekly or longer-term basis, adding: “We know there’s more to do and that’s why we’ll continue to invest in the future, whether that’s support for our team, creating jobs, investing in communities and paying fair prices to the thousands of businesses (both large and small) we work with across the country.”
A Coles spokesperson said the chain was “exploring ways to reduce prices on the products we sell”.
The spokesperson said Coles had reduced the price on hundreds of products in the past few months. They said Coles made $2.60 for every $100 a customer spent.
“This ensures we can continue to employ more than 120,000 Australians, partner with more than 8,000 suppliers and farmers, support local communities and continue to invest in value for the millions of customers who visit our stores every week,” the spokesperson said.
Qantas was last year’s big business to take first place in the Shonky awards. “In each case, we are talking about major Australian businesses that have been around for decades, and have traditionally been quite trusted,” Kirkland said.
“But people are increasingly questioning whether they deserve that trust.”
The airline stands out as a 2023 dishonourable mention “for not really having learned the lessons of its award last year”, Kirkland said.
Data-gouging rental tools
Choice also found over 40% of renters are forced to use third-party platforms such as 2Apply and Snug to apply for a home. The consumer advocate has been concerned about these types of rent tech apps for some time, while Guardian Australia has also reported on concerns about Snug.
People are required to “hand over unjustifiable amounts of personal data”, Kirkland said, putting them at risk of data breaches and information being used unfairly when screening rental applications.
He said often people are asked to provide copies of all bank statements, and details of previous employment, and in some cases photos of pets or children.
“It is not clear how that data is used to assess somebody’s suitability for a house, or what is going to be done with it afterwards,” Kirkland said.
“Finding a home as a renter is already difficult enough, particularly when rents have risen dramatically and vacancy rates have plummeted to new lows.”
Snug said in a statement it was proud to “significantly improve the experience for renters by reducing the information and time required to apply online for properties”. It said the company notified renters when property managers accessed their data, and gave renters the ability to delete their profile data at any time.
“Snug takes data security and privacy very seriously and automatically deletes sensitive information and documents at 60 days to protect customer data.”
Unreliable alarms, deceptive checkouts, and a warm fridge
According to Choice, the entire personal-alarm-market is failing consumers. Choice has tested over 40 personal alarms since 2017, “but we still can’t recommend a single one”, Kirkland said.
Its focus is on alarms used to call a person’s nominated contact in an emergency; sometimes, the device reception is too poor to even activate the emergency call feature.
“We’ve found these alarms often fail to perform their most basic functions,” he said.
Deceptive website design is also grounds for a Shonky award. Kogan was this year’s recipient for pre-selecting the free shipping option and “sneakily” signing consumers up for a Kogan First membership trial, Kirkland said.
Choice conducted a mystery shop of Kogan with 19 shoppers. Six of them accidentally signed up for the membership, and none knew how much they had agreed to pay after the trial ended. “You may find you’ve inadvertently signed up to a two-week trial … and committed to pay $99 when the trial is up,” Kirkland said.
Finally, the Xbox mini-fridge received a Shonky award for “failing to cool anything other than expectations”. It took 24 hours for the fridge to cool eight drink cans to 21C.
“For context, 21C is warmer than tap water,” Kirkland said, adding that it also used the “same amount of electricity as a regular full-sized fridge”.
It is easy for businesses to avoid getting a Shonky award, Kirkland said.
“Don’t rip off your customers, don’t make claims about your products that aren’t true and don’t take advantage of people when they are vulnerable,” he said.
“We’d love to never award another Shonky again. But over the past year we have continued to find terrible examples of businesses doing the wrong thing by their customers, leaving us with no shortage of nominees to choose from.”
Kogan, 2Apply and Ukonic – the third-party partner of Xbox that produces and sells the Xbox mini fridge – were also contacted for comment.
