Australian supermarkets have faced growing scrutiny over grocery prices since the pandemic amid the ongoing cost-of-living crisis.
On Monday, Coles and Woolworths were accused of inflating prices for a short period before placing them in “Prices Dropped” or “Down Down” promotions. Australian Competition and Consumer Commission (ACCC) chair, Gina Cass-Gottlieb, branded such savings “illusory”.
The executive at the Consumer Federation of Australia and deputy CEO at the Australian Communications Consumer Action Network (ACCAN), Gareth Downing, said a range of such retailer tactics make it difficult for shoppers to accurately and concisely compare prices.
Here are some others:
Seasonal discounts
Downing pointed to the example of a “seasonal discount” on items whose pricing remains the same year-round. He said the practice often affects durable products, such as a drying rack or barbecue equipment, creating the sense that it is a limited time offer, when it is not an offer at all.
Hidden unit pricing
By law, unit prices must be displayed accurately, clearly and close to the item price. But their display was often non-compliant, Downing said.
“It’s very hard to compare milk with other milk if you have a discount sticker over the top of the label and the unit price is in a size four font,” he said.
The “very harmful” practice affects both consumer pockets and the ability to foster vigorous pricing competition, he said.
In March, the Consumer Action Law Centre told a Senate inquiry into supermarket prices that supermarket food prices must be fair and transparent – and should not use their power and size to manipulate prices.
Shrinkflation
If you’ve wondered why your box of cereal isn’t going as far as it once did, you’re not imagining it. Many products are getting smaller and more expensive, including Kellogg’s Crunchy Nut, Sultana Bran and Froot Loops.
By subtly reducing the size of a box of cereal while increasing its price, food manufacturers and supermarkets – which ultimately set prices – have resulted in price hikes of up to 82.1% for consumers.
‘I only needed a loaf of bread’
Regular staples such as milk, bread and eggs are generally split up and positioned at the back of supermarkets. Shoppers then have to travel past other items to reach their target products, researchers told consumer watchdog Choice – eventually leaving with more than they intended to buy.
Impulse purchases – usually junk foods – line checkout queues. It’s a psychological tactic that leaves shoppers “guilt-free” to opt for higher-cost “treats” after picking up fruit, vegetables and staples, according to the watchdog.
Quick-grab premium products
Supermarkets are adjusting to the speedy shopper, grouping products together to help solve a problem, Choice has reported.
Among products suggested for a Mexican dinner, in one example given, is usually a premium product with a large margin. The shopper saves time, but spends more than they otherwise might have.
Eye level is buy level
Brands pay for prime position at aisle ends, known as “end caps”. There, shoppers, who generally skirt the supermarket rather than venture down every aisle, are targeted by their displays, experts told Choice.
Multi-buy specials
Encouraging customers to save money by buying several of one item when they only need one – or none at all – is an enduring tactic. These “deals” have long been criticised by consumer groups for not saving shoppers money, or costing more.
Two for $6 – or $3 each
At Sydney-based Harris Farm Markets, signage has been used on punnets of blueberries, for example, implying buying several of the same item (advertised as 2 for $6) offers better value. Small print below – $3 each – shows this not to be the case.
after newsletter promotion
Home brand in disguise
Choice has kept a close watch on the rise of phantom labels: home brand products that are not immediately obvious as such. Phantom labels often cost less but result in retail companies squeezing out smaller brands.
The tactic was perfected by Aldi, where the vast majority of products are own brand but are not generic or labelled Aldi. Coles, Woolworths, IGA and Foodworks have followed suit, with brands such as Koi, Cub, Thomas Dux, Community Co, Hillview, Smitten, Shine and Woofin’ Good all cited as examples of generic supermarket lines with polished new images.
Supermarkets use price tags on normally priced products that are designed to mimic specials tags. On closer inspection, said Choice, the products do not appear to be discounted at all. This and the next four tactics are part of the watchdog’s spotlight on “dodgy” and “shonky” promotions.
Discounts without context
Choice has also drawn attention to the omission of contextual information that helps a customer determine how special a “special” price is. A supermarket can label peaches at $3.90/kg as “special” – but the customer has nothing to compare the price with.
Locked in prices
Choice made a complaint to regulators after Coles customers were told that low prices of some products were locked in until a certain date, only for the price to rise before that date. Coles apologised and refunded customers.
Dropped prices – from years ago
Supermarkets have used labels to advertise prices that have fallen, in one case comparing the current price with a higher price than that seven years ago.
“Because supermarkets don’t publish historical pricing information, it’s impossible for people to know if the price was actually cheaper a week ago”, Choice said in its online petition calling for more price transparency.
Colour psychology
Green means fresh – and red and yellow signal a bargain, retail experts have told Choice. It’s no surprise, then, that Chemist Warehouse – which promotes itself as a destination for cheap toiletries and medicines – is a sea of red and yellow, while Coles’ “Down Down” deals are also emblazoned with red and yellow.
Members-only discounts
Special prices – but only for those who have handed over their personal details as part of a loyalty scheme.
Scarcity cues
Countdown clocks, falsely warning shoppers the price would rise if they did not quickly make the purchase, are part of what is known as “manipulative design” or digital “dark patterns”.
The online tactic, used to create a sense of urgency, has been highlighted by the Consumer Policy Research Centre.
The thinktank has claimed that unfair business practises are allowed to thrive because of gaps in Australian trading law.
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