‘What could be more un-Australian than ripping us off?’: Coles and Woolworths were taken down by Reddit sleuths
As those in power at Coles and Woolworths are discovering, hell hath no fury like a bargain shopper scorned. Another lesson: Anything with the whiff of a good conspiracy moves at lightning speed on the internet.
The ACCC commenced separate proceedings in the Federal Court against Woolworths and Coles on Monday morning, alleging each supermarket sold supermarket stables at regular long-term prices (“for at least six months and in many cases for at least a year”), before pulling what used to be called ‘a swiftie’ on their customers.
After keeping pricing consistent for a given product, they would then jack up costs by at least 15% for a brief window – 22 days was one example – before declaring either a Woolworths ‘Prices Dropped’ or Coles ‘Down Down’ promotion, now offering the items at a price lower than the recent spike, but higher or exactly the same then the regular price shoppers had enjoyed for a year.
“Following many years of marketing campaigns by Woolworths and Coles, Australian consumers have come to understand that the ‘Prices Dropped’ and ‘Down Down’ promotions relate to a sustained reduction in the regular prices of supermarket products,” ACCC Chair Gina Cass-Gottlieb said.
“We allege that each of Woolworths and Coles breached the Australian Consumer Law by making misleading claims about discounts, when the discounts were, in fact, illusory.”
In total, this see-saw pricing occurred with 266 Woolworths products at different times across 20 months, and 245 products from Coles over 15 months.
Such duplicitous pricing for common items (Band-Aids, Coca Cola, Weet-Bix) was unlikely to go unnoticed by Australians in the middle of a cost-of-living crisis for lone, and it didn’t.
For at least the past year, scores of unhappy shoppers turned to social media to complain about these moves. Reddit threads chronicled the deceit, while bargain-hunting Facebook groups turned to the issue with a forensic lens.
ACCC chair Gina Cass-Gottlieb said this breach was “brought to us before the commencement of the supermarket inquiry” earlier this year, with the watchdog receiving “tens of thousands of submissions” from the public regarding this bait and switch before April.
“We first identified this conduct because of contact from consumers,” she said.
“We then tracked social media and saw on X, Reddit and TikTok that hundreds of consumers were reporting prices that they did not consider were genuine.
“We followed that up with our own in-depth investigation using our compulsory powers.”
Prime Minister Anthony Albanese quickly reacted, announcing on Monday he is moving to introduce a mandatory code of conduct.
“My government said it would take action to ensure Australians are not paying one cent more than they should when they go to a supermarket,” Albanese said.
“Today we are launching the exposure draft for our new mandatory Food and Grocery Code as well as amendments to legislation we will introduce to parliament later this year,” adding that holding the duopoly to a voluntary code of conduct “hasn’t been good enough.”
Australian’s trust in Coles and Woolworths had already plummeted since allegations of price gouging played out in ugly Senate scenes in April, and this latest breach is unlikely to help things.
Coles was the fifth most-trusted brand in Australia last December. Fast-forward to March, and the supermarket fell to the ninth least-trusted — down, down a cool 221 places. By June, Coles was the fourth least-trusted brand in the country.
Woolworths took longer to fall from grace, being seen as the second most-trusted brand in the country. They moved down to the 34th most-trusted in March, then collapsed to the fifth least-trusted just three months later.
According to crisis communications expert Sally Branson, the reputational damage is likely to linger.
“In the past, it has been a stretch for everyday shoppers to connect the cost of their weekly grocery shop to the complex mechanisms at play within large corporations like Coles and Woolworths,” she told Mumbrella.
“What, though, could be more un-Australian than ripping us off with Tim Tams?”
Branson said this latest controversy is just one of the supermarkets’ many issues that make them seem “un-Australian”.
“When your whole brand is built on a carefully crafted national image, there comes a tipping point when consumers have had enough,” she explains.
“All brands have a tipping point, and the big supermarkets could be dangerously close to it. Could it be the toothpaste that does it?
“The fragility of corporate reputation and the speed at which public sentiment can shift is not just a consideration for the big players. We are witnessing an excellent lesson for SMEs, too, who do not have the profit margin, the scale, the policy protection or the corporate buffers of the big players to protect them.
“What are you doing now to ensure you’re managing and protecting your reputation? A good first start is not offering “illusory” discounts, but the second is to operate in a way that you understand you won’t be given the multiple chances a big corporation gets.
“I’ve got a significant vested interest here, but I believe every single business should be planning for reputation management the way they plan for marketing, legal and finance.”
Branson also feels Albanese needs to go harder on the supermarket giants.
“If I were a PM with sliding approval ratings, I would use stronger words than ‘not good enough’ to describe this sort of alleged practice by our supermarkets,” she said.
“We’re facing the biggest cost-of-living pressures in generations. The disconnect between politicians, corporate profits and the financial struggles of everyday Australians is becoming increasingly apparent.”
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Nathan Jolly is the Features Editor at Mumbrella. He joined the team in July, 2023.
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Special place in hell reserved for Woolies, Coles, & Qantas.
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I’ve worked in this space for 20+years. The scenario outlined by the ACCC is a well-worn path to getting a price rise through with major retailers. It used to be 12-13 weeks to price establish before promotion. Seems 3 weeks is the new norm. It would not be hard to prove all you would need to look at is scan data at a SKU level to see it. The grocers out themselves with the data agency sales to suppliers. It’s all there can’t believe the ACCC has only now just discovered this. Wilful ignorance.
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Totally agree with Obvious – why has it taken the ACCC so long to realise this issue existed?
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@1eye jak
Are you for real? So supermarkets aren’t ripping everyone off? What kind of dystopia are you happy to live in… one where monopoly markets gouge as much as they like because they sell the most basic necessities such as food.
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you’d have to be a moron to not know this was/is going on. its been going on for longer than since 2021 too.
its not just supermarkets doing it.
everyone jumped on the bandwagon and profits for big business have remined strong despite people being squeezed..why is that?..it HAS to be that their profits per item have increased, cos they arent selling more items.
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As a person with super i get tired of the goverment telling ever one the supermarkets are ripping everyone off.
They are a publicly listed company and are entitled to make a profit, and 4 the size of both companies a billion dollar profit isnt that much, considering the amount of people they employ
The goverment needs to look at itself.
Try halving
Petrol tax
Beer tax
And stop wasting money on crap that wont pass the pub test
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That’s so Australian it’s fuuny what weird alrternative reality do people live in job schemes work in other countries Australia adopts them the scam and ripoffs begin and please stop trying to say Woolworths and Coles are the only places Dont forget all 4 major banks, most Australia stores or companies i’ve worked for put at least 400% markup on everything specialists charging 250 for 10min consultancies, power cimpanies rather than pass on savings from renewable charge more and pay less then pay influencers 100,000 dollars to advertise when bo-one knows whom they are.
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No one talks about the great Kirks Scandal, that went from $2.00 for a 10 pack of cans, to $15.00 and now hovers around the $7 to $9 on average. That’s a 750% price increase.
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How about origin energy and other power companies
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I find Coles are very high in prices, if they lower their products for fast sale the items are only lowered by 5-10 cents.
I went to Coles on the 22nd October and was going to buy day old bread, I changed my mind when I saw it had only been reduced by 5 cents.
Woolworths reduce their day old bread by $2.50 much better purchase.
Woolworths lower their prices by $4-$5 for a quick sale, especially in the meat department.
I think they also need to check out Drakes prices, I tried shopping their thinking it would be cheaper but I found for the same items it actually cost me more than at Coles and Woolworths
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