Supermarket discounts: How special are specials?

Last updated on March 24th, 2026

We have all fallen for supermarket discounts, from ‘buy one, get one free’ inducements to promises of ‘everyday low prices’.

But with more than half the products bought at Coles and Woolworths on promotion, and the supermarket giants raking in profits at a time many Australians are struggling, just how special are those specials?

The Australian Competition and Consumer Commission (ACCC) has argued that in many cases, not only are the specials not that special but that consumers have been deliberately misled.

The consumer watchdog launched legal proceedings against Coles and Woolworths in late 2024, accusing them of breaching Australian Consumer law with illusory discounts on more than 500 products.

The case against Coles landed in Federal Court in Victoria in February, with ACCC legal counsel Garry Rich accusing the supermarket chain of deliberate and misleading tactics to trick shoppers with its ‘Down Down’ promotions. Woolworths will face court at a later date.

 

 

The ups and downs of pricing

The ACCC said the competition between the two supermarket giants, which it argues are the most profitable in the world, was “a race to the bottom”.

The watchdog claimed Coles made false representations about prices in a strategy known as “was/is” pricing. The cost of items is temporarily raised so that the supermarket can then mark them “Down Down” for a sales promotion.

In one of many examples shown to court, dog food was priced at $4 for 296 days, then lifted to $6 for just seven days before being listed as “Down Down” to $4.50, more expensive than the original price.

In another, baby formula was sold at $18 for 794 days then increased to $24 for 23 days, before being knocked “Down Down” to $21.

The ACCC argued that shoppers would feel misled if they knew that the price had only been $18 four weeks before.

The court heard Coles had shortened the amount of time it set a product at a higher price before discounting – known internally as guardrails – to four weeks because it was feeling the pressure from rival Woolworths.

While Coles admitted that it had broken guardrails on two products, the supermarket chain said this was due to mistakes rather than a planned campaign. Coles counsel John Sheahan said it was important to remember that “all prices are temporary – nothing lasts forever”.

 

 

Confusion over pricing

Illusory discounts are far from the only issues the ACCC has with supermarket pricing. The court action comes on the back of a long-awaited supermarket inquiry, the first in 16 years, which found that promotional practices made it difficult for consumers to know if they are getting value for money.

The ACCC recommended a raft of changes, including greater transparency around pricing and supermarket promotions.

Have you ever picked several things off the shelf based on the 'special’ or ‘discount’ tag next to it, only to see a different price come up as you’re scanning the item? You’re not alone.

Consumers also complained about price discrepancies between in-store items and what is advertised online, and online ‘sales’ prices not actually being on sale at all.

It doesn’t help that supermarket tags bear a dizzying array of terms that make you believe you are getting a bargain. A Choice survey found that one in four people were confused about supermarket discounts. A ‘low price’ tag, for example, might make you think it’s on sale when in fact the supermarket has just decided it’s a good deal. Labels like ‘prices dropped’ are often used without any indication of when, if at all, that happened.

 

 

Other common price concerns

Consumers are also being short-changed at the checkout in other ways, whether they are buying online or in store.

The rise of shrinkflation

The price of an item might not go up, but the product’s size decreases, meaning you’re paying more for less. This is known as shrinkflation and, despite the supermarkets’ denials, regular grocery shoppers say the practice is widespread.

Shrinkflation was a major concern for those who responded to the ACCC inquiry, with the watchdog recommending that supermarkets be compelled to tell consumers when package size changes to their detriment by:

• • Providing information about the previous and current unit price
  • Publishing this near the pricing ticket on the shelf and online
  • Publishing this for a set time so shoppers can be made aware of it

Treasurer Jim Chalmers also confirmed the Federal Government was overhauling the Unit Pricing Code, which requires retailers to show the unit price of an item (such as per kg or litre) to help shoppers decide if they are really getting a bargain. Mr Chalmers said strengthening the code would help combat “sneaky shrinkflation that drives people crazy”.

 

 

Finding the real specials

Grocery shopping is enough of a chore without having to worry about whether supermarket discounts are the real deal. But there are a few simple steps you can take to help keep those costs down:

• • Read the specials or discount tags carefully and compare the original price. Often there is not a deal to be had.
  • Check the unit price of an item on sale – it may be cheaper to buy the larger size than the two-for-one ‘deal’, or a competitor’s brand.
  • Confirm that multi-buys add up to a bargain. This enduring sales tactic not only encourages you to buy more than you need but invariably costs you more.
  • Compare prices online and don’t be afraid to shop around – Coles and Woolworths may dominate the market but there are alternatives. Competition is healthy.
  • Get the lowdown on the psychology of supermarket selling and you will be less likely to fall for those ‘super savers’.

   

Waiting for change

Justice Michael O’Bryan is now weighing up the evidence in the case against Coles, with a decision not expected for some months.

The stakes are high, with former ACCC boss Allan Fells describing it as the “case of the century”. If Coles loses, it can expect a hefty fine. A loss would also strengthen a class action lawsuit. If the supermarket giant defends itself successfully, this has huge implications for the lawsuit against Woolworths.

Stuck in the middle are consumers, wondering if they really are getting good deals when they shop.