Need to know
- The ACCC heard from more than 20,000 consumers and received more than 100 public submissions
- Recommendations in the report include clearer pricing information, verifiable discount promotions, and clear notifications when package sizes change
- CHOICE CEO Ashley de Silva: "We need to fix the power imbalance between supermarkets and consumers and price transparency will help us do that."
When CHOICE handed Coles and Woolworths a Shonky award in 2023, the duopoly had recently posted massive profits in the midst of a cost-of-living crisis. Something seemed amiss and we knew we had to call it out
As the final report on the supermarket sector by Australian Competition and Consumer Commission (ACCC) – which was handed down today – makes clear, those profits often came off the back of tricky pricing tactics and ever-shifting definitions of what constitutes a discount. Promotions were often just prices put back to normal after they'd been artificially inflated.
In September last year, the ACCC took both supermarkets to court for raising prices up to 15% above regular prices and then dropping them before applying the 'prices dropped' and 'down, down' labels. The prices on the promoted items were either higher or the same as the regular long-term prices.
CHOICE research from last year showed that one in four people found it difficult to identify if certain supermarket labels represented a true discount or not.
Based on this extensive analysis we have recommended a range of measures to improve conditions for competition in the sector and deliver better outcomes for consumers and suppliers
ACCC deputy chair Mick Keogh
The 20 recommendations in the ACCC report address these issues and others and are well in line with CHOICE's submission to the inquiry. They also reflect the complaints we've been hearing from fed up shoppers in recent years.
"In the past 12 months the ACCC has heard from more than 20,000 consumers who responded to our consumer survey, received more than 100 public submissions, held eight supplier roundtables, reviewed tens of thousands of internal documents, conducted private hearings and ten days of public hearings, and analysed billions of points of supermarket data," says ACCC deputy chair Mick Keogh.
"Based on this extensive analysis we have recommended a range of measures to improve conditions for competition in the sector and deliver better outcomes for consumers and suppliers."
Clearer pricing is key
The recommendations include clearer pricing information, discount promotions that are genuine and verifiable, a stronger Unit Pricing Code, and clear notifications for customers when package sizes change – which generally means shrink.
The ACCC's report confirms this is a highly concentrated market, with the major supermarkets appearing to be among the most profitable in the world during a cost-of-living crisis
CHOICE CEO Ashley de Silva
"The ACCC's report confirms this is a highly concentrated market, with the major supermarkets appearing to be among the most profitable in the world during a cost-of-living crisis," says CHOICE CEO Ashley de Silva.
"This is why it's so important that we shine a light on prices and shrinkflation, regulate promotions, and make it easier for consumers to get value for money.
"We need to fix the power imbalance between supermarkets and consumers and price transparency will help us do that."
Government agrees 'in principle'
The federal government, which directed the ACCC to conduct the inquiry, says it "agrees in principle with the recommendations, which build on actions the government has already taken and will be considered as part of our existing work".
The ACCC report does not go so far as to recommend breaking up the duopoly to ramp up competition in the sector, but it does call for government support for community-owned stores in remote areas and to make it easier to complain about price gouging in these areas.
Treasurer Jim Chalmers says the government's focus on the sector "is about ensuring Australians aren't treated like mugs by the supermarkets".
Our ongoing supermarket crackdown means more competition, better prices and better deals for Australians
Treasurer Jim Chalmers
"Our ongoing supermarket crackdown means more competition, better prices and better deals for Australians," he adds.
Minister for Agriculture Julie Collins says the recommendations "will help level the playing field for Australia's farmers and producers".
Australian Retailers Association chief industry affairs officer Fleur Brown says "this represents the eighth taxpayer-funded report into supermarkets in the past few years".
"Our members have fully cooperated with the ACCC throughout the inquiry process and are carefully reviewing the report's findings and will continue to take constructive action to address cost of living pressures."
Shrinkflation on notice
Last year, CHOICE identified 15 supermarket products that had shrunk while the price stayed the same or even went up. For shoppers, this can be the clearest way to detect that we're being taken advantage of.
... the recommendation to introduce shrinkflation notices will help everyone make better-informed decisions while shopping
CHOICE CEO Ashley de Silva
"Consumers deserve more information when shrinkflation occurs, and the recommendation to introduce shrinkflation notices will help everyone make better-informed decisions while shopping," says de Silva, adding that the recommendation to require supermarkets to publish prices instore and online, and to make it easier to compare prices, "will help consumers shop around to get the best value".
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Stock images: Getty, unless otherwise stated.
