The Federal Court has officially ruled that Coles’ “Down Down” sale campaign misled shoppers by hiking product prices too briefly before discounting them back down.
The ruling was delivered by Justice Michael O’Bryan in Melbourne this morning, bringing an end to a case first lodged by the Australian Competition and Consumer Commission (ACCC) in 2024. It focussed on the “Down Down” discount campaigns running from 2022 to 2023.
While the top consumer watchdog alleged in its initial filing that Coles had misled shoppers with “Down Down” discounts on a whopping 245 products, the court case centred on just 14 sample products — ruling that 13 of those were sold in a misleading manner.
The samples were all supermarket staples, ranging from two-litre Coca-Cola bottles to Colgate toothpaste, Rexona deodorant and Arnott’s Shapes biscuits, among others.
In terms of how shoppers were misled, O’Bryan found that Coles had briefly bumped the price of the products to above the initial price on the ticket, only to “discount” it down. Often, the “discounted” price was still more expensive than what was on its original ticket before the price bump.
For example, Shapes were advertised as going from $5 a packet before jumping to $6.50, then being marked at $5.50 on a “Down Down” discount promotion.
While O’Bryan said the price increases themselves were “commercially justifiable” given supplier demands, he said the period between the hike and the discount was too brief to be considered an actual discount.
He ruled that Coles should’ve advertised and sold the products at the higher price for 12 weeks before applying the “Down Down” discount, but most products in the sample were only at the higher price for four weeks.
As a result, “the discount represented on the tickets was not genuine” and Coles’ conduct was “misleading, in contravention of Australian Consumer Law”, O’Bryan said, per the Sydney Morning Herald.
Putting it more bluntly, the ACCC’s barrister Garry Rich asked Coles: “Why on earth are you telling your customers your prices are going down? They’re not.”
During separate hearings throughout the case, Coles’ lawyers argued the price bumps were due to inflation, with barrister John Sheahan saying “ordinary, reasonable consumers” know that prices generally trended upward due to inflationary pressures.
While penalties have not yet been handed down after the ruling, experts expect Coles could cop hefty fines for the misleading campaign, and could be forced to rethink how it promotes discounts.
A similar ACC-led case against Woolworths, brought at the same time as the Coles one, is still awaiting a ruling.
Coles first launched the “Down Down” campaign back in 2010 with a jingle and red foam hand branding, and it was one of the supermarket giant’s longest running promotions.
Lead images: Getty
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