Up up prices gave shoppers bang for buck, court told
Coles wanted to give customers value for money by offering products at “discounted” rates when they were actually higher than the original prices, a court heard.
Coles is defending claims from the Australian Competition and Consumer Commission that it deliberately misled customers during its “down, down” campaign, which was first launched in 2010.
Under the plan, the price of a jar of Coles brand quince paste was increased from $3 to $4.50 for four weeks, then reduced to $3.15.
Internal emails showed Coles group category manager Ed McCutchan advocated keeping the price of the paste at $4.50 for two weeks, rather than four, before being reduced to the “down” price.
The ACCC’s Garry Rich SC told Mr McCutchan in the Federal Court in Melbourne on Friday that he wanted the paste to be sold at the new “reduced” price as soon as it was authorized.
“Yes, I wanted to continue to provide value to customers with this ticket,” Mr. McCutchan said.
“You could sell quince paste to customers at the white ticket price of $3.15 and deliver the same value to customers, right?” said Mr. Rich.
“Yes,” Mr. McCutchan replied.
Mr. Rich later suggested that “downward” promotion was more effective at generating sales than other mechanisms, and Mr. McCutchan agreed.
“And would you agree with me that the reason downstream mechanisms are more effective is because downstream tickets tell customers they are getting a discount?” Mr. Rich asked.
“That might be one of the reasons,” Mr. McCutchan replied.
When asked what the other reasons were, he said there was more “real estate” for “discounted” tickets on the shelves, which drew shoppers’ eyes to the product supposedly on sale.
The ACCC alleges the supermarket giant deliberately increased prices on thousands of products daily before offering discounts at prices equal to or greater than the original shelf price for 15 months.
He claims the “down and out” campaign tricks shoppers into thinking they’re getting a bargain.
The supermarket giant on Thursday admitted to cracking down on its suppliers, threatening to remove products from shelves if they don’t meet the retailer’s demands.
The case before Judge Michael O’Bryan continues on Wednesday.
