'All retailers are on notice now': What the ACCC's findings against Coles means for Aussie shoppers

OPINION -- With Coles having been found to have misled shoppers with illusionary discounts, and Woolworths facing similar accusations from the Australian Competition and Consumer Commission (ACCC), our two biggest grocery retailers are facing a reckoning.

Federal Court judge Michael O'Bryan delivered his ruling today, finding Coles disguised price hikes as discounts under its "Down Down" price campaign, with 13 of the 14 of these pricing tickets deliberately misleading customers.

The outcome of the ACCC's similar action against Woolworths is pending, but it doesn't look good.

Today Money Expert Joel Gibson says this decision will serve to put "all retailers on notice".

The ACCC brought separate but similar cases against Coles and Woolworths, alleging the supermarkets misled consumers by increasing prices for a short time before lowering them to above the original price and marketing it as a discount.

"The ACCC was all in on this, they took a big swing," Gibson told nine.com.au

"I think it means that we'll have a much clearer guideline around what's a genuine discount and what's a dodgy discount, which will be good."

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"Every Black Friday retailer, everyone who's selling anything at a purported discount in Australia, is now on notice.

"If it's only been at a higher price for a month, then you can't call it a discount. So I think it does transform discounting across the whole sector.

"It actually gives retailers much more clarity around what they can and can't do, which is a good thing."

Aussie shoppers can pat themselves on the back for the outcome, having diligently posted so-called "dodgy" sales by Coles and Woolworths on social media, with some going even further by lodging formal complaints with the ACCC.

"It was very much a bottom-up action by the ACCC," Gibson said.

"They were inundated with complaints. There was a lot of content on social media as well, and that was what gave them the confidence to pursue it.

"People often feel when they make a complaint to agencies like the ACCC that it just goes into a void and nothing happens, and sometimes that's the case. But in this case, it's actually led to a really significant outcome."

Gibson doesn't feel this finding against Coles, and potentially against Woolworths, will impact either business aside from "some reputational damage".

"It's really hard to predict what the fines will be, they could be in the hundreds of millions of dollars. But these are very big, very, very profitable businesses. It won't hurt them," he said.

"I actually think shoppers are already pretty cynical about the supermarkets and I don't think people are going to abandon Coles and Woolworths en masse as a result of this.

"I'd be surprised if they lose a lot of customers. It's definitely going to do some reputational damage but I think people will keep shopping there and I think shareholders probably don't need to pay for [the finding against Coles]."

Consumer group Choice has said it welcomes the finding and has called for "stronger pricing reforms".

"While the judgement is good news to hold supermarkets accountable for clear, transparent pricing, it reinforces the need for stronger pricing reforms," Andy Kelly, Director of Campaigns at Choice, said in a statement.

"At a time when many households are facing cost of living pressures, it's more important than ever for consumers to be able to trust that promotions reflect genuine discounts.

"Hiking prices whilst telling consumers that prices are down has allowed Coles to have its cake and eat it too.

"The Nature's Gift dog food 'Down Down' promotion was found not to be misleading as the tag did not include a 'was' price, despite having only been sold at a higher price for one week.

"Without requiring supermarkets to publish the previous price of the product, supermarkets could potentially remove the 'was' price and continue to engage in similar conduct.

"We continue to call on the Federal Government to implement the ACCC supermarkets inquiry recommendations in full, by introducing minimum information requirements for price displays and discount promotions, including the previous price of the product, the date range over which that previous price applied, and the percentage of the discount."

A Coles spokesperson has said in a statement: "We acknowledge the Federal Court decision in relation to the ACCC proceedings. Our priority has always been – and will continue to be – delivering value to our customers.

"The Court found that all price increases resulted from supplier cost price increases and were, therefore, commercially justifiable. This case highlights the importance of clarity for both retailers and customers alike.

"And the need for clear, practical guidance on minimum price establishment periods to ensure the retail industry can avoid unnecessary litigation in future. We are in the process of reviewing the judgment."

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