‘Down Down’ specials aim to be genuine savings, says Coles boss

Coles chief executive Leah Weckert has said the supermarket aims to deliver genuine discounts as it prepares to defend its case against the ACCC’s accusations of “illusory discounts” and unveil an expanded Christmas range to lure cash-strapped shoppers.

In her first public comments since the consumer watchdog took Coles and Woolworths to court for allegedly misleading customers over a “was” price that was actually a temporary price rise, Weckert said the supermarket took the matter very seriously.

Coles is defending the ACCC lawsuit against alleged “illusory discounts”.Credit: James Alcock

“All of our specials, discounts and programs like ‘Down Down’, we aim to genuinely provide genuine savings for our customers, and that goes to the heart of customer trust, and it’s something that we take very seriously at Coles,” she said.

Weckert said she understood discounts and specials were especially important in the current economic environment, given the cost-of-living challenges faced by households, some of which have already started managing their budgets for the coming holiday season.

“We’re working to provide value, and our ‘Down Down’ program is a really important part of that because it enables us to work with our suppliers to reduce the prices of food and grocery items for an extended period of time.”

Coles is defending the Australian Competition and Consumer Commission case, and Weckert declined to comment further because it is a legal proceeding.

Last month, the watchdog said the two major supermarkets had breached Australian consumer law by misleading customers.

Coles allegedly sold 245 products in this manner between at least early January 2021 and October 11, 2022, including 16 packs of Strepsils throat lozenges for $5.50. The price was raised to $7 on October 12 for 28 days and then lowered to $6 as part of its “Down Down” promotions, the ACCC said.

The supermarkets will also face greater scrutiny under federal government plans to overhaul Australia’s merger laws. Under the changes, the sector will be asked to meet a new set of thresholds in which it will have to tell the ACCC of any intention to merge or acquire another business, which will be reported on a public register.

The ACCC will investigate any merger involving a large business with a turnover of more than $500 million buying a smaller business or assets with a domestic turnover of more than $10 million.

Clayton Utz competition partner Kirsten Webb said the removal of a concentration-based threshold and reliance on monetary thresholds was an improvement for businesses. “Monetary thresholds are substantially more objective and will make notification obligations more certain,” Webb said.

Coles chief Leah Weckert says the supermarket giant aims to deliver genuine discounts.Credit: Eamon Gallagher

However, the requirement that all acquisitions over 20 per cent by private companies where one party has a turnover of more than $200 million be reported to the ACCC was “problematic.”

“Requiring large private companies to notify small minority stakes where there are no competitive overlaps is at odds with claims of a ‘more targeted’ regime,” Webb said.

‘Competitive season’

On Tuesday, Australia’s second-largest supermarket unveiled an expanded range of more than 400 Christmas food and drink products as it looks to cater to a growing proportion of Australians who are celebrating end-of-year festivities at home.

Shoppers are expected to spread their Christmas spending across more retailers and over a longer period of time as they manage budgets more carefully.

“They’re really spending a lot of time researching and being very thoughtful about where they go,” said Weckert. “It’s going to be a very competitive Christmas season.”

Australians were buying more items with longer shelf lives, such as puddings and pies, early and taking advantage of major shopping events such as Black Friday to purchase gifts, she said.

A survey of 800 customers found that a third of customers had already begun budgeting and buying for Christmas.

Coles has been increasing its own-brand, exclusive and private label ranges over the past year in a bid to attract customers flocking to Aldi for its good-quality products at lower prices. Home-brand products are selling twice as quickly as branded items, and represent about a third of Coles’ total sales.

“I would say Christmas and Easter are a couple of the times when own-brand really comes to life because we bring out so many limited edition products,” said Weckert.

Choice’s most recent quarterly supermarket survey found Aldi was the cheapest supermarket for a basket of 14 common grocery items.

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