Coles misled shoppers with 'Down Down' discounts, court rules

A Federal Court ruling on 14 May 2026 found that Coles Supermarkets Australia engaged in misleading conduct by advertising discounts under its “Down Down” promotion when the previously stated prices had not been applied for a reasonable period. The judge concluded that for 13 of 14 sampled tickets the discount representation was not genuine and would likely mislead an ordinary shopper.

The case was brought by the Australian Competition and Consumer Commission (ACCC) in 2024 and targeted a broader program that covered some 245 products between February 2022 and May 2023. The court considered detailed pricing histories for the sampled items and found that short-term price increases followed by a return to a lower “Down Down” price created the appearance of a discount that did not reflect genuine savings. Coles defended its practices as lawful and argued that its promotions were understood by customers in context.

Markets reacted to the ruling: Coles’ shares experienced selling pressure after the judgment as investors reassessed potential fines and reputational damage. Given the duopoly structure of Australian grocery retail, outcomes from high-profile litigation can influence investor sentiment across the sector, including peers such as Woolworths. Real-time market coverage reported a dip in Coles’ stock following the judgment.

The decision has broader implications for regulatory scrutiny of pricing and consumer protection during periods of inflation and supply stress. The ACCC’s parallel proceedings against Woolworths over its “Prices Dropped” campaign remain before the Federal Court, and rulings in these cases could set precedents for how promotional pricing is assessed under the Australian Consumer Law. Regulators have indicated increased attention to practices that may obscure true value for money for consumers.

Analysts expect the court may impose penalties, compliance orders or remedial measures that could raise operating costs and require changes to promotion governance. Investors will closely watch any announced fines and the ACCC’s next steps in the Woolworths case to gauge sector-wide legal and reputational risk. Both companies are likely to review and tighten pricing controls and disclosure practices to mitigate further regulatory exposure.