If you’ve ever slapped a big red “WAS $X, NOW $Y” on your website and felt pretty pleased with yourself, you might want to pay attention.

The Australian Competition and Consumer Commission (ACCC) has taken Coles to the Federal Court of Australia over what it calls ‘illusory’ discounts under the supermarket giant’s long-running ‘Down Down’ promotion.

Why? The consumer watchdog alleges some discounts weren’t really discounts at all. If the ACCC wins, it could change how every small business in Australia handles discounting.

What is Coles accused of doing?

The ACCC alleges Coles temporarily increased the price of certain products before dropping them into a ‘Down Down’ promotion, making the discount look bigger than it really was.

One example raised in court and cited by the ABC, involves Strepsils. The regular price was $5.50 for more than 640 days. It then rose to $7 for 28 days before being promoted at $6. The shelf ticket showed ‘was $7, now $6’ but that ‘discounted’ price was still higher than the long-standing $5.50.

ACCC chair Gina Cass-Gottlieb described the discounts as “fake or ‘illusory’”, suggesting that shoppers thought they were getting a bargain when they weren’t.

The ACCC alleges similar patterns across 245 products between February 2022 and May 2023.

Coles denies the allegations. It says price rises were driven by inflation, supplier costs, and increases in global commodity prices. It argues the ‘Down Down’ prices were genuine reductions from the current shelf price, which had replaced earlier prices due to cost changes.

Do you discount? This could affect you

Former consumer watchdog boss Allan Fels told the ABC: “The stakes are enormous.” He added: “It’s the case of the century because it affects not only Coles and Woolies, but millions of businesses who discount [and their customers].”

That’s the key bit for small business owners. In essence, the Federal Court is testing how ‘was/now’ pricing works.

The ACCC is arguing that:

• You can’t inflate a price briefly just to create a higher “was” price
• A discount must be genuine compared to the real, regular selling price
• Context and timing matter, not just the maths

The court will look closely at how long a price was in place before being increased, and whether the increase was genuine or tactical. If it finds the conduct misleading or deceptive under consumer law, the penalties could be eye-watering. Professor Fels told the ABC he would not be surprised if penalties reached “hundreds of millions of dollars” if the allegations are proven.

There’s also the possibility of follow-on class actions and forced changes to pricing practices across the sector.

Offer genuine discounts

Before you panic and rip down every sale tag, take a breath. Most small business owners aren’t playing games with pricing. But this case is a reminder of a few things.

Firstly, ‘was’  prices need to be real. If you advertise “Was $50, now $25”, the $25 discount needs to be real.

That means the orignal price charged needs to be genuine and charged for a meaningful period. If you hike the price for couple of weeks just so you can say it’s “on sale”, you’re skating on thin ice.

The ACCC is focusing on how long prices were in place. If yourconstnatly changing your prices, you need to be able to justify why. If supplier increases are driving you price hikes, that’s fine. Seasonal adjustments? Also fine. Artificial spikes to engineer a bigger discount? Not fine.

Transparency is important. As Choice’s Andy Kelly told the ABC: “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.”

Customers are savvier than ever. They screenshot prices. They compare online. They post on TikTok. If something smells off, it probably won’t stay quiet.

This isn’t about ‘price gouging’

While price gouging has been all over the headlines of late,  the ACCC’s case e is not about whether supermarkets made too much profit. (That’s a story for a different day). The ACCC is fighting for how discount pricing is being presented to consumers.

Even if Coles wins, the scrutiny on discounting practices isn’t going away. The federal government has already banned ‘excessive pricing of groceries’ from July 1, and the ACCC has flagged further action may follow. In other words, the era of misleading pricing is over.

Discounting is a powerful driver for sales. As evidence heard in court and reported by The Guardian showed, products can sell significantly more when they’re promoted as being on sale.

However, the law cares about substance, not just spin. If you’re running promotions this year, ask yourself: Is this discount genuine? Would I be comfortable explaining this pricing history in court? Would my customers feel misled if they saw the full timeline?

In 2026, ‘Down Down’ might just mean the regulator is coming knocking.

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