{"id":620830,"date":"2026-04-21T06:38:09","date_gmt":"2026-04-21T06:38:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/620830\/"},"modified":"2026-04-21T06:38:09","modified_gmt":"2026-04-21T06:38:09","slug":"woolworths-engaged-in-marketing-magic-to-trick-customers-consumer-watchdog-tells-court-business","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/620830\/","title":{"rendered":"Woolworths engaged in \u2018marketing magic\u2019 to trick customers, consumer watchdog tells court | Business"},"content":{"rendered":"

Woolworths engaged in \u201cmarketing magic\u201d to trick customers into thinking they were getting genuine discounts as part of the supermarket\u2019s \u201cPrices Dropped\u201d promotion, the consumer regulator has told a court.<\/p>\n

The landmark trial between the Australian Competition and Consumer Commission (ACCC) and Woolworths began in the federal court in Sydney on Tuesday, almost two months after hearings ended in its very similar case against Coles<\/a>.<\/p>\n

The ACCC alleges Coles and Woolworths broke Australian consumer law by offering \u201cillusory\u201d discounts on hundreds of everyday products through the misleading use of their respective \u201cDown Down\u201d and \u201cPrices Dropped\u201d promotion programs.<\/p>\n

During the ACCC\u2019s opening statements on Tuesday, Justice Michael O\u2019Bryan pressed the consumer watchdog\u2019s lawyers on one of its central claims.<\/p>\n

The ACCC alleges that, between September 2021 and May 2023, Woolworths temporarily increased the prices of at least 266 products before placing them on \u201cPrices Dropped\u201d promotions to make shoppers think they were getting a discount.<\/p>\n

The strategy is known as comparative or \u201cwas\/is\u201d pricing<\/a>.<\/p>\n

The third \u201cdiscounted\u201d price was in most cases higher than the original long-term price had been before the short-term price spike, which the ACCC argues was a deliberate strategy to soften price increases that had been planned in advance.<\/p>\n

Sign up for the Breaking News Australia email<\/a><\/p>\n

Court documents show the products were sold at their first price for 180 days or longer, before their prices were increased by at least 15% but only for a period of 45 days or less.<\/p>\n

O\u2019Bryan questioned whether the length of time the items were sold at the second, increased price was relevant to the ACCC\u2019s argument that Woolworths had falsely communicated to customers they were getting a discount on the third price.<\/p>\n

He said shoppers probably would not analyse the \u201cwas\/is\u201d prices on an item\u2019s promotional ticket to such a degree, and the ACCC\u2019s case relied on a \u201clevel of analysis that consumers aren\u2019t going to think about\u201d.<\/p>\n

\u201cWhether \u2026 the saving is \u2026 real might depend upon a range of factors including the period [of time] in which the \u2018was\u2019 price had been in the market, but also including how was the \u2018was\u2019 price established,\u201d he said.<\/p>\n

O\u2019Bryan asked similar questions of the ACCC in its case against Coles in February. On Tuesday, the watchdog\u2019s barrister, Michael Hodge, pushed back.<\/p>\n

Hodge said consumers \u201cat least\u201d understood \u201cvery simple\u201d concepts, including that a \u201cPrices Dropped\u201d ticket meant an item\u2019s long-term, regular price had genuinely decreased.<\/p>\n

\u201cIt communicates to a consumer that Woolworths has done something remarkable or unusual, it has dropped the regular shelf price,\u201d Hodge said.<\/p>\n

He described the strategy as \u201csubtle magic\u201d and \u201cmarketing magic\u201d.<\/p>\n

He presented to the court an example of a family pack of Oreos, which was at a first price of $3.50 for nearly two years, then lifted by 43% to $5 for 22 days before it was placed on Prices Dropped program at a price of $4.50.<\/p>\n

\"ColesColes and Woolworths are fighting claims of fake discounts and a lack of competition – video<\/p>\n

He said that while the item\u2019s new ticket told consumers the packet of biscuits \u201cwas\u201d $5, they were paying a dollar more than the month before.<\/p>\n

\u201cIf they were to contrast this price history with what is conveyed to them on the product, the view that they would form is that the ticket was misleading or false,\u201d he said.<\/p>\n

The statement of agreed facts between the ACCC and Woolworths shows the supermarket often negotiated with suppliers to offer \u201cdiscounts\u201d on products at the same time as it agreed to raise their prices.<\/p>\n

In 265 cases, the pre-planned \u201cPrices Dropped\u201d price was more expensive than the products\u2019 long-term prices before the price spike, and in 11 cases was the same price.<\/p>\n

Of 245 products identified by the ACCC, Woolworths and the supplier had agreed on the item\u2019s final \u201cdiscounted\u201d price in advance before the products were temporarily inflated.<\/p>\n

In the case of 232 products, the suppliers bore at least some of the financial burden of having their products included in the \u201cPrices Dropped\u201d program, which reduced their profit margins.<\/p>\n

Woolworths phased out its use of the \u201cPrices Dropped\u201d program at the end of 2024.<\/p>\n","protected":false},"excerpt":{"rendered":"Woolworths engaged in \u201cmarketing magic\u201d to trick customers into thinking they were getting genuine discounts as part of…\n","protected":false},"author":2,"featured_media":620831,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[64,63,99],"class_list":{"0":"post-620830","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-au","9":"tag-australia","10":"tag-business"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/620830","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=620830"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/620830\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/620831"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=620830"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=620830"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=620830"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}