Coles is facing the Federal Court of Australia after allegations of “illusory” discounts were included in a case filed by the Australian Competition and Consumer Commission (ACCC).
The ACCC claims that Coles’ longstanding “Down, Down” promotion doesn’t actually feature lower prices, leading to a landmark case that could impact the entire grocery retailing sector.
Coles denies the allegations that the promotion was misleading, claiming that any subsequent price rises were made at the behest of suppliers facing cost pressures.
Beginning today, February 16, the case could bring hefty fines for Coles if it is found to be at fault. The hearing is expected to last for 10 days.
Consumer advocacy group Choice welcomed the action taken by the ACCC. Andy Kelly, the group’s director of campaigns and communications, said: “We know from our extensive work in this area that supermarket promotions can be highly confusing for customers, and have a significant influence on how people make purchasing decisions while grocery shopping.
“During a cost-of-living crisis, retailers should be doing all they can to ensure clear, transparent pricing – not obscuring rising prices with confusing promotions.”
Kelly added that this is “not only a wake-up call for Coles, but for other retailers who may be engaging in similar practices”.
The impact of a guilty verdict, however, could send reverberations across the Australian stock market.
“This could be the competition-law case of the century,” Grant Garraway, of Grant Garraway Franchise Consultants, said in a post on LinkedIn. “The reputation damage would be worse. Their share price would be hammered.”
