Yahoo Finance Major 'concerns' after Woolworths, Coles and Aldi shoppers put to test by 'confusing' supermarket tactic
The major supermarkets are confusing customers with labels that don't clearly indicate if something is on special or not.
A quarter of Australian shoppers find it difficult to tell if a promotional tag in leading supermarkets Coles, Woolworths and Aldi represents a genuine discount. That's according to new research from consumer advocacy group CHOICE.
The group said none of the supermarkets "acknowledged the harm that these confusing labels are causing" to Aussie shoppers as they defend against allegations of "deceptive pricing practices". The government and the Australian Competition & Consumer Commission (ACCC) are investigating if the Coles and Woolworths duopoly has allowed them to rinse consumers or local suppliers.
Rosie Thomas, CHOICE director of campaigns, said less than half of the 1,000 people surveyed could identify a discount online and feared in a busy supermarket they had "even less of a chance of correctly decoding these unclear labels".
“The countless types of labels used by the major supermarkets are clearly confusing consumers, who are struggling to determine what is and is not a genuine discount," Thomas said.
"This is particularly concerning considering many people are trying to make their grocery shop as affordable as possible in a cost of living crisis."
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So, from 'prices dropped', to 'super savers' and 'while stocks last', which was found to be the most confusing? And can you tell the difference?
Coles
The hardest label for shoppers to understand was Coles' 'white stocks last', with CHOICE finding less than half could determine if there was a deal on.
"To make things worse, even after asking Coles, CHOICE still doesn’t know if this is a discount or not,” Thomas said.
Shoppers were also confused about the 'down down' label.
"We take clear and accurate pricing information very seriously and always aim to ensure that our specials represent value for our customers," a Coles spokesperson said in response to the survey findings.
CHOICE made a complaint about Coles to the ACCC in October after the prices of 16 "locked" items were increased.
BIG PICTURE: CEO Leah Weckert admitted in the inquiry Coles could do a better job on pricing and discounts after being accused of underpricing wholesale value.
She said shoppers were impacted by higher prices that "flowed on" when suppliers were paid better.
"There is no bad intent there, but we definitely could execute against it better, and we are working towards holding ourselves to a higher level of account on that," Weckert told the senate.
Woolworths
Woolworths - Australia's largest supermarket - wasn't immune to the same problem as Coles as it has a label called 'prices dropped' slapped onto items across its supermarkets.
“This Woolworths ‘prices dropped’ label also confused respondents, with only half of respondents saying they could quickly and easily tell if the product was discounted or not,” Thomas said.
H20 Coconut water was reduced from $6 to $4 in 2019, but still had a red 'prices dropped' label in store.
"We have doubts about whether a product that has been the same price for almost 5 years should be promoted as having a ‘dropped’ price. It’s no wonder consumers were confused as to whether it’s actually discounted or not,” Thomas said.
Unlike 'prices dropped', Woolworths said 'low prices' tags were there to indicate "a good deal". Still, they confused consumers. CHOICE said there wasn't enough information about what 'member prices' labels meant.
"We strive to clearly and simply signpost the ways that our customers can find value and spend less every time they shop with us – we offer everyday low prices, member offers, as well as specials and longer-term stable price drops," a Woolworths spokesperson said of the survey.
BIG PICTURE: Outgoing Woolworths CEO Brad Banducci told the inquiry he believed there was competition in the Australian supermarket sector and blamed pricing on inflation.
He acknowledged there was "a lot of work ahead" to lower prices for struggling shoppers and said Woolworths would push to improve labelling.
"Clearly, we need to do a better job of also calling out our everyday low prices, which gives certainty on essential items," he said.
Aldi
Aldi has been touted as the cheaper of the bigger players, but CHOICE found consumers were just as confused when it came to 'super savers' labels and whether they represented a discount.
It has three other labels; 'limited time only', 'price reductions' and 'special buys'.
BIG PICTURE: Aldi is the third biggest supermarket in Australia and both Coles and Woolworths used the German retailer as an example of competition in the $133 billion supermarket sector.
Aldi claimed low prices "year round" and not a rotation of mark-ups and discounts were responsible for a 4 per cent increase in prices over 2023.
The previous year, Aldi claimed to have saved Aussies who didn’t even shop with them $675 million simply by pricing some items so low that the major supermarkets had no option but to bring theirs.
'Sloppy marketing' or dirty tactics?
CHOICE claimed consumers can't trust the big supermarkets to "do right by consumers" and called for better regulations around how prices were displayed.
Former ACCC chair Graeme Samuel said there are laws designed to stop "misleading and deceptive conduct" that supermarkets should be complying with.
"You don't advertise something as a special when it's not really a special at all," he said.
As part of the ACCC's 12-month inquiry, submissions from the public are being assessed after an appeal to dob in instances of “confusing or misleading” practices like “was/now” pricing or “shrinkflation”.
Consumers are reminded it's not just the wording on tags that can lead them to believe there's a special. Colours like red and yellow are also used to indicate a sense of urgency, which retail marketing expert Louise Grimmer said was "design to get people purchasing".
"It's all about that scarcity effect," the University of Tasmania academic said.
"People think I better get in quickly and I better buy this because usually a special or a discount is only for a specified period of time."
The senate inquiry and ACCC investigation continue.
A poll of Yahoo Finance readers found an overwhelming 89 per cent of voters did not think the inquiry would make a difference to prices.
