Coles, Australia's second-largest supermarket chain, has been caught with its hand in the cookie jar - or rather, in the promotional pricing jar. The Federal Court ruled on Thursday that the grocer misled shoppers with its 'Down Down' campaign, which turned out to be more of a 'Not That Down, Really' campaign.

Justice Michael O'Bryan delivered the verdict, dealing a blow to Coles' argument that its discounts represented genuine savings during a period of high inflation. The Australian Competition and Consumer Commission (ACCC) had sued both Coles and rival Woolworths, accusing them of duping shoppers between 2021 and 2023 by using promotional programs to disguise price increases on hundreds of products.

Here's the scheme: Coles sold 245 products at one price for a median period of a year, then jacked up the price for a median of just 28 days, before slapping a 'Down Down' label on a third price that was still higher than or equal to the original. The 'was' price, it turns out, was a fleeting fiction - shoppers saw a higher price next to a 'discounted' one, but had no idea the 'was' price was only there for a cameo appearance.

Coles even conceded during the trial that by the time it raised the price from the original to the 'was' price, it had already planned with the supplier what the new 'Down Down' price would be. So much for spontaneous savings.

The court examined 12 sample products, including Rexona deodorant, Arnott's Shapes, 2-litre bottles of Coca-Cola, and Karicare baby formula, plus 14 pricing tickets. Justice O'Bryan found that 13 out of 14 tickets were misleading, noting the average shopper would not think the discounts were genuine if they knew how briefly the 'was' price was in effect.

In a silver lining for the industry, the judge suggested that if the 'was' price had been in place for at least 12 weeks, the tickets wouldn't be misleading. That's likely to set a precedent for how long a price rise must stick before a discount is legally kosher.

Coles now faces penalties, with the amount to be determined later. Meanwhile, Woolworths is still awaiting its own verdict from a similar trial heard earlier this year. One thing is clear: Australian shoppers can now be confident that 'Down Down' might just mean 'Up, Then Down a Tiny Bit.'