Did a beloved biscuit brand's 'sale' actually cost shoppers more? That's the explosive question at the heart of a major federal court showdown, where a former Coles manager has admitted to human error that may have led to misleading pricing for Arnott's Shapes.
This isn't just any price dispute; it's being called "the case of the century" by a former head of the Australian Competition and Consumer Commission (ACCC). The ACCC is accusing Coles of a deliberate strategy to trick customers with seemingly great deals on everyday items. The alleged tactic? Briefly inflating prices before slapping them with a "Down Down" discount, making them appear to be a bargain when they weren't.
During the third day of this high-stakes trial, legal counsel for the ACCC, Garry Rich, zeroed in on the pricing of Arnott's Shapes Multipack 375g Variety Pack. He questioned Rebecca Thompson, the former biscuits and cookies category manager, about how these popular biscuits were handled.
Here's where it gets interesting: Arnott's wanted to raise the price of their Shapes biscuits from $5. This price had been a consistent "Down Down" promotion for a significant period – over 340 days – until May 2022. Coles eventually agreed to a new "Down Down" price of $5.50.
However, Coles' own internal rules, known as "guardrails," were in place to prevent this from happening too quickly. These guardrails were designed to ensure a product had a regular "was" price displayed for at least four weeks before it could be put on a "Down Down" sale. This was to prevent shoppers from being misled.
So, what should have happened? A pricing ticket would typically show a "was" price of $6.50 and a discounted "Down Down" price of $5.50. But according to the ACCC's claims, Coles didn't follow this. They reportedly sold Shapes at $6.50 for just one week, then offered a 30% discount the following week, only to revert to $6.50 for another two weeks before finally marking it down to $5.50.
Mr. Rich directly asked Ms. Thompson if she agreed that Coles had violated its own guidelines by moving too fast. Her admission? "Yes, it was an error."
And this is the part most people miss: the ACCC alleges that in the case of Arnott's Shapes, shoppers weren't actually getting a discount at all, despite what the price tag implied. The watchdog claims that by paying $5.50, customers were actually paying 50 cents more than the previous "Down Down" price from just a month prior, which was $5 – a 10% increase!
Coles, however, disputes this interpretation.
In another heated exchange, Ms. Thompson was presented with an internal email from a price and value team member. This email outlined the specific dates when a "Down Down" promotion for Arnott's Shapes could be implemented, strictly adhering to the internal guidelines. While Ms. Thompson initially seemed to question whether she received the correct dates, Mr. Rich pressed her, suggesting the information provided was accurate. She conceded, "I missed that at the time, so yes." She attributed the situation to "human error," not solely blaming the individual who sent the email.
Ms. Thompson also mentioned that Coles had to account for a twice-yearly discount promotion with Arnott's, which she suggested contributed to the pricing issue.
The ACCC's core argument is that Coles intentionally misled shoppers. They contend that products were kept at a regular price for at least six months, then briefly hiked up before being presented as a "Down Down" deal. The watchdog claims shoppers believed they were getting a bargain, but in reality, they were paying the same amount, or even more, than the product's usual price.
But here's where it gets controversial... Coles is fighting back, arguing that they faced unprecedented price hikes from suppliers and that their own costs were soaring due to rampant inflation. They deny the discounts were fake, asserting they offered genuine price reductions. Furthermore, Coles challenges the ACCC's ability to define what constitutes a "regular price" and how long it must be offered before a discount is permissible.
What do you think? Was this a genuine case of human error, or a calculated move to mislead shoppers? Were you a Coles shopper during this period, and did you feel misled by "Down Down" pricing? Share your thoughts in the comments below – we'd love to hear your perspective!
