If you’ve ever stared at a “Down Down” tag at Coles and felt like the math wasn’t mathing, you’re very much not alone.
Right now, Coles is in the Federal Court facing what’s been dubbed “the case of the century” for supermarkets, after the ACCC accused it of misleading shoppers with so‑called “illusory” discounts on hundreds of everyday items.
The stakes sound huge, but the core question is actually pretty simple: were those red hands pointing to genuine bargains, or to price hikes in disguise?
What is the ACCC saying Coles did?
The ACCC’s case focuses on 245 products, covering normal trolley stuff like dog food, soft drink, biscuits and yoghurt. The regulator says it found the same pattern over and over again: Coles kept an item at a regular price for a long stretch, increased that price for a relatively short period, and then dropped it to a “Down Down” price while marketing that as a discount. In a lot of those examples, the “down” price was the same as, or higher than, what shoppers had been paying before the brief spike.
One dog food example has become the poster child. A 1.2 kilogram Nature’s Gift loaf sold for $4 for close to 300 days. Then the price jumped to $6 for a week. After that, Coles set a “Down Down” price of $4.50.
On the ticket, that looks like a saving compared to $6. In reality, most people who’d been buying that product for months were suddenly paying more than before, under a big red hand telling them the price was “down”. In court, the ACCC argued that while the statement on the ticket was literally true, it gave a misleading impression because it hid the long period when the product was cheaper.
When PEDESTRIAN.TV asked former ACCC boss Allan Fels to boil down the behaviour the watchdog is trying to stop, he put it bluntly: “The core behaviour is alleged false discounts when prices are temporarily raised, then reduced, with the reduction being claimed as a discount.” For him, that structure is the heart of the case, rather than the exact choice of product.
Coles denies misleading anyone. Its lawyers say the prices on the shelf were correct, the discounts were real when you compare them to the previous price, and that the ACCC is building its case on a very detailed idea of what’s going on in a shopper’s head.
The supermarket’s argument is basically that most people are looking at what the price is now and whether it seems okay in the middle of a cost‑of‑living crisis, not running a mental spreadsheet of price changes over the past year.
Why is “Down Down” in the firing line?
“Down Down” isn’t just another promo. Coles has been running the campaign since 2010, with Status Quo re‑recording a version of “Down Down” for its ads and those giant red foam hands popping up everywhere. For a lot of shoppers, that branding has turned into a kind of promise that the price you’re seeing is genuinely lower and staying that way.
That’s part of why this case is so sensitive. The court has heard evidence about what “Down Down” means to Coles internally and how it played out in real life.
Former manager Rebecca Thompson told the court that a Shapes promotion, where boxes were tagged as dropping from $6.50 to $5.50 even though they’d been available for $5 only weeks earlier, was “an error” caused by internal confusion about a pre‑agreed 30 per cent discount period.
In another example involving dog food, Coles’ own barrister described the short window between a price rise and a “Down Down” promotion as a mistake and an outlier.
Senior executive Debra Galle explained that Coles shortened its usual “price establishment” period the minimum time between raising a price and then putting a product on “Down Down” — because it was being hit with an “extraordinary” number of cost increases from suppliers. She said the supermarket needed more flexibility to discount products and “unlock the value for customers” while costs were moving so fast.
The ACCC isn’t really arguing with the idea that the period was chaotic. What it is saying is that whatever was going on behind the scenes, the combined effect of the “Down Down” branding, the timing of the price changes and the way the tickets were presented left many shoppers with the wrong impression about whether they were getting a genuine discount.
That’s where Allan Fels sees the legal line. When we spoke, he stressed that “the case is not really about market power and whether high prices are justified or even how competitive the industry is. It’s simply about misleading conduct.” In his view, pointing to inflation or supplier pressure doesn’t answer the key question, which is whether people were led to believe they were saving money when they actually weren’t.
What’s really at stake for shoppers?
On a practical level, the outcome of this case will shape more than just Coles’ in‑house paperwork. If the ACCC wins, the supermarket could face significant penalties and be pushed to change how it designs and advertises promotions, especially anything linked to “Down Down”. There’s also a separate class action in the background that could, depending on how things play out, lead to refunds for some customers who bought the affected products.
But the bigger shift could be in how the major chains compete. When P.TV asked Fels what a win for the regulator might mean at shelf level, he said, “Hopefully, to the extent there is competition between the big two, it will continue in a more honest form. They will have to stop making false claims about price reductions when the reality is price increases.” He thinks both supermarkets “will have to come up with more honest ways of competing”, which he described as “telling the full truth about prices, including whether they’re going up rather than going down”.
Coles has suggested that if the ACCC’s view gets up, one consequence could be fewer specials or less aggressive discounts, which sounds ominous if you’re already counting coins at the checkout. Fels reads that argument as a bit of a tell about how concentrated the supermarket sector is. “If they’re saying that this intervention would mean higher prices for consumers, that’s a serious sign of a lack of competition in the industry,” he said. In a genuinely competitive market, his view is that businesses would still find other ways to offer attractive prices without relying on discount tactics that confuse people.
For younger Australians who’ve basically done all their adult grocery shopping in a cost‑of‑living crisis, this is also about trust. Fels called the case “quite important in rebuilding trust to a degree”, but added that “once trust is lost it’s hard to get back, so it will take a while”. If you’ve ever found out that a “special” was actually more expensive than the old normal price, that probably rings true.
If Coles wins, its current approach to discounts will get a legal tick, but the judgment will still matter. As Fels pointed out, “a case is likely to give guidance on the distinction between true and false discounts”, so even a loss for the ACCC should give clearer boundaries on what retailers can and can’t do when they shout about bargains.
Coles’ case is set to continue in the Federal Court over the next fortnight as more witnesses and internal documents are tested.
The ACCC has also brought a separate, similar case against Woolworths over its own discount campaigns, so the Coles trial is effectively the first half of a much bigger legal showdown over how both of the major supermarkets market “specials” to shoppers.
The one thing this case won’t do is magically slash your grocery bill overnight. The court isn’t setting prices or deciding how profitable supermarkets are allowed to be. What it can do is set some ground rules for honesty. And in a moment where everyone is watching their total climb at the self‑checkout, being able to trust that “down” actually means down would be a decent start.
Lead image: Getty
The post Did Coles Mislead Us With Its ‘Down Down’ Deals? What The ACCC Trial Means For Shoppers appeared first on PEDESTRIAN.TV .
