Woolworths’ ‘Prices Dropped’ rules intended to prevent ‘gaming’ the promotional system, executive tells court
Summary
Woolworths is facing a court case where the Australian Competition and Consumer Commission (ACCC) says the supermarket used its “Prices Dropped” promotions to hide planned price increases, making discounts look real when they were not. Woolworths’ chief commercial officer said the company changed rules about how long a product must be at one price before going on promotion because of growing inflation.Key Facts
- The ACCC accuses Woolworths of temporarily raising prices of at least 266 products before putting them on “Prices Dropped” sales to make discounts look bigger.
- Woolworths originally required products to be priced steadily for nine months before a promotion; this was later shortened to as little as three to six weeks.
- These changes were made as inflation increased, shifting focus to how prices looked to customers rather than supplier agreements.
- The “Prices Dropped” program is meant to prevent the supermarket or suppliers from manipulating prices to mislead shoppers.
- The ACCC claims Woolworths broke its own rules ("guardrails") designed to keep prices stable before discounts.
- Woolworths’ chief commercial officer, Paul Harker, said the guardrails discouraged cycling products on and off sales without good reason.
- The pricing changes often lasted 45 days or less, after at least 180 days of a stable, lower price.
- Woolworths and suppliers reportedly planned these price phases well before promotions happened.
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