Australia's Federal Court has concluded that Coles Supermarkets Australia presented misleading discount claims in its "Down Down" promotions, in a decision that could prompt closer regulatory attention to pricing tactics across the grocery sector.
In proceedings brought by the Australian Competition and Consumer Commission (ACCC), the court found that Coles made false or misleading representations on 13 of 14 promotional tickets examined. The ACCC alleged that Coles temporarily lifted prices on 245 products by at least 15% before advertising them as discounted under the "Down Down" banners, with those sale prices being equal to or higher than earlier regular prices and therefore creating illusory savings.
Financial markets reacted to the judgment: Coles shares fell more than 3% to $20.490 by 02:18 GMT, marking the stock's lowest level in two months.
The ACCC, which initiated the court action in September 2024, said the challenged promotions ran between February 2022 and May 2023. The regulator has said the pricing conduct made it more difficult for consumers to identify genuine value when shopping for household essentials. In a statement, ACCC Chair Gina Cass-Gottlieb said: "We welcome the Court’s finding that Coles breached the Australian Consumer Law." She added that the pricing practices made it harder for consumers to identify genuine value while shopping for household essentials.
The case cited everyday branded items among the products at issue, including Coca-Cola soft drinks, Cadbury chocolates, Colgate toothpaste, and Weet-Bix cereal. The court will determine penalties and any additional orders at a subsequent hearing.
Coles, which operates more than 840 stores nationwide and is Australia’s second-largest supermarket operator, introduced the "Down Down" campaign in 2010 as a central pricing strategy designed to lower prices on frequently purchased goods. The Federal Court finding in this case may intensify scrutiny of discounting approaches used by major grocers.
Separately, the ACCC has ongoing proceedings against rival Woolworths over comparable discounting practices; those matters remain before the Federal Court.
What happens next
- The court will set penalties and other orders at a later date related to the ACCC's findings.
- Coles' share price may remain sensitive to developments in the court’s penalty decision and related regulatory scrutiny.