‘Down Down’ was about the vibe, not specific discounts, Coles claims in court

Coles says its years-long “Down Down” campaign was less about advertising specific discounts, but rather a broader indication it was trying to keep prices low, as it defends claims the promotions misled customers.

On Tuesday, the second day of the landmark case lodged by the Australian Competition and Consumer Commission against the supermarket over alleged “illusory” discounts, Coles’ legal team continued laying out its arguments, claiming the watchdog’s mention of the “Down Down” ad jingle was “a bit of a furphy”.

Coles’ lead barrister, John Sheahan, KC, noted how lawyers for the ACCC had played two TV ads promoting the “Down Down” campaign for the court, to draw attention to the context in which consumers viewed ticket labels on shelves, which mentioned the sale slogan.

Sheahan argued evidence about the broader advertising context was irrelevant because the ACCC’s complaint was focused on movements in prices for a range of supermarket items.

“It’s all, with respect, a bit of a furphy,” Sheahan told Justice Michael O’Bryan.

The watchdog’s complaint alleges that Coles moved an item from its regular price, known as price one, to an artificially higher price two for a deliberately short period, before reducing it to a third “Down Down” price. The “Down Down” promotions included a “was/is” price demonstrating the difference between the third and second price.

Much of Coles’ arguments that were aired on Tuesday focused on consumers’ sense of time and attention spans, while emphasising that commercial forces such as suppliers’ costs were a key influence on pricing decisions.

Coles’ lawyers also attempted to paint a picture of a “Down Down” price not as a temporary discount but a long-term lower price that consumers could rely on, to the extent that they could be confident that if they didn’t buy a “Down Down” product during one shop, it would be available at that price at the next.

Sheahan made this point while acknowledging that “Down Down” shelf labels – which did advertise the “was/is” price differential central to the ACCC’s claim of misleading consumers – did not advertise an end date.

He said the advertising campaign and the big red hand was not advertising a specific discount, but a broader indication the supermarket was “trying to keep prices low”.

Sheahan also conceded an argument the ACCC made on Monday that Coles, when setting a second, higher “establishing” price for a product before a “Down Down” discount, had planned and agreed on the third “Down Down” price at the time the second price came into effect.

But he suggested that while this might be true, commercial considerations in how the supermarket decided price increases and decreases with suppliers due to market forces and inflationary pressures were more relevant. “In the end, all prices are temporary, nothing lasts forever.”

Sheehan also said ACCC’s argument assumed a thought process from shoppers that was unrealistically complex.

He said that in a high-inflation environment, people understood prices would be changing, and that “Down Down” ticket labels with a was/is price were “a legitimate sign, a genuine sign, of good value today”.

“The idea of a previous regular price in the sense of one that is not relatively short … is too complex to credibly attribute to an ordinary, reasonable consumer walking down an aisle at Coles,” Sheahan said.

He said the ACCC needed to prove its claim that the second, “ephemeral price” was not genuine to prove that its subsequent “Down Down” prices were not genuine.

On Monday, the first day of two weeks of hearings, the Federal Court in Melbourne heard evidence put forward by the ACCC outlining internal Coles staff emails where a top Coles manager had warned colleagues that advertising a product’s price as “Down Down” when it was cheaper just four weeks earlier was not in the spirit of the marketing campaign, before the supermarket giant went on to do just that.

The case centres on a sample of items including dog food, Shapes biscuits and Coca-Cola sold between January 2021 and May 2023, which the ACCC’s lawyers said had been sold under a strategy that suggested discounts which were “utterly misleading” or a “half-truth”.

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