The reputation of Australia’s major supermarkets has taken another blow after the federal court ruled that Coles misled shoppers with its ‘Down Down’ promotion by advertising fake discounts. Justice Michael O’Bryan found that the supermarket chain contravened consumer law by using inflated ‘was’ prices to create a misleading impression of savings.
The ‘Down Down’ campaign, one of Australia’s best-known retail promotions, relies on ‘was/is’ comparative pricing. The court heard that Coles internally set ‘guardrails’ requiring a product to be sold at the higher ‘was’ price for a minimum period before applying a discount. However, in late 2021 and early 2022, Coles shortened this period from 12 weeks to just four weeks in response to competitive pressure from rival Woolworths.
Consumers noticed the discrepancies and reported examples to the Australian Competition and Consumer Commission (ACCC). The regulator identified hundreds of affected products, including deodorant and butter. Justice O’Bryan stated that the promotions would not have been misleading if the ‘was’ price had been maintained for at least 12 weeks.
The ruling comes as Woolworths faces similar allegations from the ACCC. The court will now determine penalties, which could result in fines of tens of millions of dollars. The decision has further damaged the reputation of Australia’s supermarket duopoly, which has faced criticism for profiting during a period of high living costs.
In his judgment, Justice O’Bryan described a “race to the bottom” in compliance with consumer laws due to competitive pressure. Coles prioritised commercial interests over customer transparency, leading to the misleading conduct.
