Supermarket discounts 2026: price laws may dull specials

If the Coles or Woolies run already feels like walking into a contact sport, Australia’s new excessive-pricing prohibition is unlikely to make the trolley feel lighter overnight. The rule started on 1 July and targets the old move of lifting a shelf price before dressing the later drop up as a bargain. At the kitchen table, the question is blunt: if the big chains get nervous about high-low pricing, the weekly shop may shift from chasing big specials to coping with steadier, still-ugly prices.

Plenty of families do not buy groceries on some tidy average. They buy on timing: coffee this week, washing powder next week, kids’ cereal only when it drops, and a freezer restock when the half-price stickers finally show up. The law is aimed at dodgy price games, which is hard to argue with. The trade-off flagged in news.com.au’s reporting is that Coles and Woolworths may decide the safe play is fewer loud discounts, especially on products that have trained shoppers to wait for the red tag.

Under the regime the ACCC says it is now policing, the prohibition applies to supermarkets with annual revenue above $30 billion. Right now, that means Coles and Woolworths. The watchdog says it will examine whether a chain has bumped a price up and then sold the same item at a supposed discount in a way that misleads shoppers about the real value of the deal. Treasury says penalties can reach $10 million per breach under the Food and Grocery Code, giving the rule some bite beyond the usual polite warning shot.

The regulator knows why this lands. In the ACCC’s own announcement, acting chair Catriona Lowe said household grocery stress was the point of the exercise.

“We know that grocery prices continue to be a key concern for households.”

Catriona Lowe, ACCC

Fair enough. Groceries are one of the few bills people feel several times a week, and unlike the power bill, the fridge will not let you look away for long.

The awkward bit is that economists and retail analysts do not all agree on what the chains will do next. Professor Gary Mortimer told news.com.au Australia has already put the supermarket sector through repeated scrutiny without finding clear proof of classic price gouging, which is why he expects the shift to be behavioural rather than dramatic. A retailer worried that a high-low cycle could be read the wrong way has an obvious escape route: flatter pricing and fewer specials that make people chuck a U-turn into the car park.

“we’ve had multiple inquiries, including government inquiries, into price gouging, and no inquiry found any evidence of price gouging”

Gary Mortimer, news.com.au

That does not mean the next shop gets dearer in a straight line. It may mean something more annoying: fewer obvious wins. The big chains can still compete, but they may do it with quieter price settings, tighter promotion calendars or smaller markdowns that look less risky under the new rule. For households that stock up only when the tag turns red, that can feel a lot like paying more, even if the basket total moves in smaller steps than the old boom-and-bust specials cycle.

What changes at the checkout

The sector’s margins explain why this gets messy fast. According to news.com.au’s report, Coles’ overall net profit last financial year was 2.4 per cent and Woolworths sat around 2 per cent. Those numbers do not leave much room for heroic consumer generosity. If the law narrows the room for aggressive promotion tactics, the chains are unlikely to wear the whole difference out of kindness. More likely, they will test where a safer everyday price lands and how much discounting still keeps them out of regulator trouble.

The government’s line is that this is still a win for shoppers. Assistant minister Andrew Leigh said in Treasury’s statement the reforms are meant to stop artificial inflation before a fake bargain lands in the catalogue or app.

“These changes protect Australian families from artificially inflated prices on their groceries.”

Andrew Leigh, Treasury Ministers

That may prove true if the crackdown strips out the most cynical pricing behaviour and forces sharper scrutiny of how specials are presented. Still, a cleaner market is not the same thing as a cheaper trolley. One is about fairness. The other is what people notice when they tap their card on a Thursday night.

For now, shoppers are entering a more cautious supermarket-pricing era with no guarantee it feels better week to week. If the watchdog starts hauling chains up over inflated reference prices, consumers may eventually get clearer, fairer specials. In the short term, the school-run shop has the same ugly question hanging over it: the weekly bill might not explode, but the easy discount wins could get harder to spot. That is cold comfort when the grocery budget is already doing plenty of heavy lifting.