So I was in the local Woollies the other day and was seeking out the 65g tubs of Wrigley’s spearmint gum. The standard price across most places is $4.50, with some stores bumping it up to $5.00 (Coles, Big W). I can allow that because well, inflation. But I saw it at $4.50 with a specials tag. Ironically, this is still the case on their website:
For as long as I can remember the price has always been $4.50, at least at Woollies, and I have bought this gum quite a lot. Had they increased it to $5.00 before the so-called special I would have understood. But touting the normal price as a special is just disingenuous and (possibly) breaks the ACL.
The whole point of specials is to save consumers money. This doesn’t, at least not very much. Real specials are 20%, 30%, 50% etc, not 10%. Frankly Woolworths deserved their Shonky award this year.
It looks like the recommended retail price for 64g container of Extra chewy is $5.00. The Chemist Warehouse fortunately publishes RRPs…
And, like Woollies, they also have it on special to undercut Woollies by $0.01.
It won’t be against the ACL as Woolworths are correct in stating they are on sale for $4.50 (which is $0.50 discount off the RRP).
While they can for the savvy shopper, specials are really about increasing sales of products and encouraging those who don’t usually buy the product, it buy it. As many consumers are brand loyal, it means that they potentially gain new long term customers.
It is also about encouraging existing customers of a product into stores which have specials so that they also part with their hard earned cash buying other products which aren’t on sale.
The other reason for sales is to turn over old stock.
Specials aren’t done to save consumers money, they are about benefiting the retailer.
A new product comes on the market with RRP $5.00, Colesworths sell it for that price for a few months and then drop the price to $4.50. Is that a special? Five years later the price is still $4.50, is it still a special? Is the product good value at that price?
A new product comes on the market with RRP $5.00, Colesworths sell it for $4.50. Is that a special? Five years later the price is still $4.50, is it still a special? Is the product good value at that price?
A new product comes on the market with RRP $4.50, Colesworths sell it for $4.50. Five years later the price is still $4.50? Is the product good value at that price?
A product is on the market Colesworths sell it for $4.50. We have no price history or RRP. Five years later the price is still $4.50. Is the product good value at that price?
My take is that words like ‘special’ or ‘sale’ are about as meaningful as words like ‘natural’. They’re sales tactics meant to make buyers believe something’s being sold for less than usual. Sometimes the price is genuinely less than the usual, but the mere presence of the word doesn’t mean that’s so.
A ‘sale’ or ‘special’ sign would only prompt me to buy if (a) it’s something I normally buy regularly and (b) the price is less than I usually pay.
A 5th I have seen at least once and for a 6th, ‘the game’.
A new product comes on the market with RRP $5.00 but Colesworths sell it for $5.50 as their ‘everyday price’ for a few weeks or months and then drop the price to $5.00. Is that a special? Five years later the price is still $5.00, is it still a special? Is the product good value at that price?
A new product comes on the market with an RRP of $35.00. After a few months they raise the ‘everyday price’ to $39.00 and for their ‘rewards members’ they know buy it, every few weeks they offer points so in that week the effective price after redemption remains $35.00; non-rewards members pay the $39.00. The product is very rarely put on ‘catalogue special’ for $35.00. Is that good marketing or what?
To put it in more technical jargon, “special” relies on you buying into the framing psychology, as does any percentage off. You are being invited to compare to some anchor point that may or may not indicate a real market price. This presentation of a discount compared to some manufactured base has no necessary connection with value for money.
A few years ago Kogan was taken to court by the ACCC over misrepresentation where they pumped up their prices so they could drop them for a sale. Kogan copped a $350,000 fine. This action was appropriate as they clearly set out to deceive.
There are other situations where proving deceit at law would be too hard or impossible but as in my four examples claiming a price was dropped need not relate to a bargain or as you say, mean anything.
I see Colesworths are going to be grilled in the senate. It will be interesting to see if any of the grillers have got their staff to come up with solid evidence of excessive margins or profiteering or if it will be just an unpopularity contest that at a quick glance resembles action on the cost of living. Does a jeer-along remove the need for legislation about market concentration?
You would hope that they have solid evidence, but I would be surprised if they do. If they did, you would think they would have mentioned this instead of just making general claim to generate cheers from the haters. It is also not a good sign that the Greens seem to believe that only Coles and Woolworths are doing wrong.
They also use red tags to grab your attention, making you think it marks a special. But all it marks is a claim to “Low Prices”. The price on the red tag is the same as the one below it.
