You’re looking to buy an electric toothbrush. You’re in Woolworths and you see one of the Oral-B kits advertised for sale at $99.50.
The product appears to be a half-price bargain, reduced from its usual price of $199, which also happens to be how much the same item costs at Coles.
But what you wouldn’t know, unless you were paying very close attention, is that the toothbrush kit had been 50% off at Coles and full price at Woolworths just a week earlier – or that, more often than not, when it was on promotion at Coles, it was full price at Woolworths, and vice versa.
New analysis of the “High-Low” pricing strategy employed by Australia’s two biggest supermarkets comes after a court found this week Coles deceived customers with misleading discounts in its “Down Down” promotional program.
The Oral-B toothbrush is one of 10 products whose prices switched on and off promotion at Coles and Woolworths largely in sync over the past two years, according to data provided to Guardian Australia by the price tracking website CW Scanner.
The products, which include Dr Oetker Ristorante frozen pepperoni pizza, Blackmores fish oil tablets, Weis mango and ice-cream bars, mini Magnums and Quilton toilet paper, are a sample of the many products that follow this pricing pattern, according to CW Scanner.
While “High-Low” pricing is separate to the Australian Competition and Consumer Commission’s proceedings against Coles and Woolworths, the tactic raises further questions over the lengths the major supermarkets take to compete against one another. The strategy first came to light during the 2024 ACCC supermarkets inquiry and in an ABC report.
“This is not what competition looks like,” said Erin Turner, the chief executive at the Consumer Policy Research Centre.
“When markets work, businesses feel pressure to give customers a great deal all of the time – not every other week.”
Turner said cyclical “High-Low” pricing could be misleading if it is combined with claims in store that “trick” people into thinking they’re paying a rare low price, rather than the discounted price that occurs every two weeks.
In some cases, the switch from a promotional price to full price happens simultaneously, or almost simultaneously, across the two supermarkets.
The data shows Natural Confectionary Co’s Juicy Burst lollies have often gone on sale for $2 at Coles on the same day they revert to their full price of $5 at Woolworths.
It is similar with 1.25-litre bottles of Coca-Cola: they have been on sale for $2 at Woolworths while being sold at their full price of $4 at Coles. Often those prices swap on the same day.
The data shows that Fairy 5 Power Action Lemon dishwashing tablets sold for the same price at Coles and Woolworths for a few days. Then the supermarkets swapped again, with one selling the product for $76 and the other for a sale price of $30.
Dr Christina Anthony, a consumer behaviour expert at the University of Sydney, said the pricing tactic was “commercially rational” and it wasn’t necessarily misleading or a sign of “active collusion” between the major supermarkets.
However, she said the strategy could erode transparency for shoppers and make it even harder to know what items’ “real” prices were.
“The research tells us consumers have very poor memory for price and it’s more about whether it feels like it’s cheap or not,” she said.
Andy Kelly, a director at the consumer advocacy group Choice, said “High/Low” pricing tickets had a “huge impact” on consumer behaviour and skewed shoppers’ perceptions of price.
“There’s also an argument that if you’re putting a product on sale … it’s skewing the value of that product,” he said. “If they’re selling it at 50% for at least half the time, does that kind of become the usual price of that product?”
He said the strategy disadvantaged consumers who were not able to wait to buy something when it was on sale, or those who did not have time to track pricing patterns.
The ACCC’s final report from its examination of the supermarket industry said the widespread use of “High Low” pricing and its cyclical nature meant products could be on promotion a lot of the time.
At Woolworths, an item may be promoted on special for up to 26 weeks a year excluding multi-buy promotion, the ACCC report said.
Similarly, Coles’ internal policies state that specials must not be offered for more than half the year, cumulatively.
During private hearings, a Coles category manager told the inquiry they preferred to avoid clashing promotions with Woolworths on the same product but they were not aware when their rival would put particular items on special.
In response to the Guardian, Coles said there were “many factors which help us decide if and when to put items on special, including seasonality, availability, supplier preference, but also the cadence with which our customers most commonly purchase products so they can access great value prices when they need it”.
A Woolworths spokespersons said the timing of promotions was influenced by suppliers “who need to have adequate stock to meet higher demand over a promotional period”.
“We don’t have any visibility of our competitors’ future pricing or promotional plans,” they said.
Prof Gary Mortimer, a retail expert at the Queensland University of Technology, said “High/Low” pricing was often driven by the suppliers rather than being initiated by the supermarkets.
“What happens is suppliers, say Arnott’s, want to always make sure their Tim Tams are the market leader,” he said. “They will fund a promotional campaign at Coles this week … and then it will rotate back [to Woolworths]”.
The operator of the CW Scanner website, who shared the data with the Guardian, said the site allowed shoppers to compare prices between Coles and Woolworths by scanning the barcode of an item or entering its URL.
They said they weren’t scraping data, which was legal but against the supermarkets’ terms and conditions, and instead took information from their websites application programming interfaces.