The Illusion of Discount: How ‘Was/Is’ Pricing is Reshaping Consumer Trust and the Future of Retail

A staggering 3.8% rise in the Consumer Price Index (CPI) in the year to December 2025, with groceries contributing a significant 3.4% to that increase, underscores a growing anxiety among Australian consumers. But beyond the headline inflation figures, a more insidious practice is coming under scrutiny: the manipulation of perceived discounts. The ongoing court case between the Australian Competition and Consumer Commission (ACCC) and Coles, alleging misleading “Down Down” promotions on at least 245 products, isn’t just about one supermarket – it’s a harbinger of a shift in how retailers will attempt to navigate a future of persistent price pressures and increasingly savvy consumers.

The Anatomy of an “Illusory” Discount

At the heart of the ACCC’s case lies the “was/is” comparative pricing strategy. Coles is accused of temporarily inflating prices before applying a discount, creating the illusion of savings. The example of Nature’s Gift wet dog food – a 50% price hike from $4 to $6, followed by a “discount” to $4.50 – perfectly illustrates the tactic. While technically “literally true,” the ACCC argues this practice is “utterly misleading,” as consumers are led to believe they’re receiving a genuine reduction when, in reality, they’re paying a price comparable to, or even higher than, the previous regular price. This isn’t simply a matter of semantics; it’s a breach of trust.

Beyond Coles: A Systemic Issue and the Looming Woolworths Case

The implications extend far beyond Coles. The ACCC is also pursuing a similar case against Woolworths, highlighting a potentially widespread practice within the Australian supermarket duopoly, which controls two-thirds of the market. This isn’t an isolated incident; it’s a symptom of a broader trend. Retailers are facing mounting pressure from rising wholesale costs, supply chain disruptions, and increased competition from online marketplaces. The temptation to employ deceptive pricing tactics, while legally risky, is understandable from a short-term profit perspective. However, the long-term consequences – erosion of consumer trust and potential regulatory backlash – could be far more damaging.

The Rise of Dynamic Pricing and Algorithmic Deception

The Coles case is a crucial stepping stone in understanding the future of pricing. We’re already seeing the proliferation of dynamic pricing, where prices change in real-time based on demand, competitor pricing, and even individual customer data. As algorithms become more sophisticated, the line between legitimate price optimization and manipulative pricing will become increasingly blurred. Expect to see more retailers employing AI-powered pricing strategies that exploit cognitive biases and psychological vulnerabilities. The “was/is” tactic is a relatively crude example; future iterations will be far more subtle and difficult to detect.

The Role of Price Comparison Websites and AI Shopping Assistants

Fortunately, consumers aren’t entirely powerless. The rise of price comparison websites and AI-powered shopping assistants offers a potential counterweight to manipulative pricing. These tools can track price fluctuations, identify inflated “was” prices, and alert consumers to genuine discounts. However, even these tools are facing challenges. Retailers are increasingly employing techniques to obscure pricing data and prevent scraping, making it harder for comparison sites to function effectively. The battle for price transparency is just beginning.

The Future of Retail: Transparency, Regulation, and Consumer Empowerment

The Coles case is likely to trigger a wave of increased scrutiny of supermarket pricing practices. The ACCC’s pursuit of significant penalties and community service orders sends a clear message to the industry: deceptive pricing will not be tolerated. However, regulation alone isn’t enough. A fundamental shift in consumer expectations is also needed. Consumers must become more skeptical of advertised discounts and demand greater transparency from retailers.

Looking ahead, we can anticipate several key developments:

• Increased Regulatory Oversight: Expect the ACCC to become more proactive in monitoring pricing practices and enforcing consumer protection laws.
• Technological Arms Race: Retailers will continue to refine their pricing algorithms, while consumers and comparison sites will develop more sophisticated tools to detect manipulation.
• The Rise of Subscription Models: Retailers may increasingly shift towards subscription-based models, offering fixed prices for a basket of goods, bypassing the need for frequent discounting.
• Focus on Value, Not Just Price: Consumers will prioritize retailers that offer genuine value – quality products, excellent customer service, and ethical sourcing – over those that simply offer the lowest price.

The Coles case isn’t just about a supermarket and a regulator; it’s about the future of trust in retail. As pricing becomes increasingly complex and opaque, consumers will demand greater transparency and accountability. The retailers that embrace these principles will thrive, while those that continue to rely on deceptive tactics will ultimately lose out.

What are your predictions for the future of pricing and consumer trust? Share your insights in the comments below!