The competition regulator’s case against supermarket giant Coles kicked off yesterday in the Federal Court, in a landmark legal action which will test what is really a discount from retailers. The ACCC is alleging that Coles deliberately used promotions to disguise big price rises in a bid to maintain returns. The actions meant shoppers got the impression that hundreds of products were getting cheaper when they were actually becoming more expensive.
JB Hi-Fi’s share price jumped 7.5 per cent yesterday after the electronics retailer announced a big jump in sales during the December half to more than $6 billion. There was higher spending in mobile phones, small appliances, games, computers and fitness products.
New federal Liberal leader Angus Taylor has given his first set speech since taking the top job on Friday, and he focused on improving standards of living. He promoted higher defence spending and reshaping immigration around Australian values, as well as going to the next election pledging tax cuts.
Treasury Wine Estates has tumbled to a first half loss of $649 million, as it wrote down the value of its business. The group also scrapped its interim dividend, sending its share price down five per cent.
Australia’s biggest steelmaker, BlueScope, which recently rejected a $13.2 billion takeover bid, has more than doubled its half year dividend and said there will be more payouts later in the year.
Former UK Prime Minister Tony Blair made a better politician than a husband and has never bought his wife, Cherie Blair, flowers. That’s according to Cherie herself, who told a Channel 4 documentary that her husband of 46 years was "unromantic."
Fear-o-meter
Day one in Federal Court, Coles v ACCC over alleged misleading of customers on discounts. The case has major ramifications for Coles, Woolworths, the Australian Competition and Consumer Commission and retailing generally.
There was a focus yesterday on dog food, and it pretty much explains the ACCC’s case. A 1.2-kilogram bag of Nature’s Gift dog food had been sold for $4 for 296 days before February 7, 2023.
Then for a period of just seven days, alleges the ACCC, Coles increased the price of that product by 50 per cent to $6.
On the eighth day, Coles began offering that product forsale at a price of $4.50. But that is more than what customers had been paying for all but seven of the previous 303 days.
Coles, in documents filed with the court, has argued that the price increases were largely put in place after requests from suppliers, and only after they were satisfied that the producer needed to charge more not to be out of pocket, according to a report in the AFR.
The ACCC claims that the relationship between the supermarket and the supplier is largely irrelevant. It alleges that saying the dog food is “on sale” is misleading.
This case, and one Woolworths will face later in the year, puts all these stories back in the media, and whatever the legal outcome, will be a public relations disaster for the supermarkets.
Fear & Greed Q+A today
On the huge moves in share prices so far this earnings season:
“Sometimes you genuinely do get one update that massively changes the thesis on a stock and the outlook, and that happens. But not probably to the frequency that’s happening today. Particularly on the downside, some of the downward moves in share prices on a miss — like an EPS [Earnings Per Share] consensus miss or an earnings downgrade — are enormous. Not only do you have to assume that this year is going to miss by, say, 20%, but that every other year beyond that is going to be 20% lower than what you’d expected before this. And that’s kind of hard to grasp sometimes. I think it’s just this — the market seems a bit jittery. It’s act first and ask questions later. And I would absolutely expect that to continue for the remaining two weeks of reporting season.”
Qantas has surged up the global rankings for on-time performance. In January it ranked third in the world for major airlines (those operating more than 20,000 flights a month). Two years ago it was 106th.
