What does ‘significantly excessive’ grocery pricing actually mean?

The law says ‘significantly excessive’. Nobody gave shoppers a neat number.

From July 1, Australia's biggest supermarkets are banned from charging prices that are significantly excessive compared with the cost of supply plus a reasonable margin. In practice, the rule is aimed at very large retailers, which currently means Coles and Woolworths.

That sounds clear until you try to apply it to a block of cheese, a carton of eggs, or a tub of peanut butter. There is no fixed percentage that says a grocery price has gone too far. There is no shelf-label calculator that turns red when a margin gets cheeky.

That is why significantly excessive grocery pricing Australia shoppers are now hearing about is more of a legal test than a quick aisle test. The ACCC has to look at the full situation before deciding whether a price crosses the line. For the rest of us, the useful question is simpler: what can you actually check before the item lands in the trolley?

What the ACCC can look at

The ACCC can consider a wide mix of pricing factors. That includes what comparable retailers charge, whether the price varies by area, whether the product is seasonal, how long the price has stayed high, and whether shoppers have realistic substitutes nearby.

It can also look at waste risk, promotional patterns, input cost increases, supplier rebates, whether a product is temporary or a standard line, whether the price is online or in-store, how competitive the category is, brand premiums, and supply chain disruptions.

In plain English: a high price by itself is not automatically unlawful. A high price with no good explanation, sitting well above comparable options, after costs have settled, and wrapped in a dodgy promotion, is the kind of pattern regulators may care about. The detail matters. Annoyingly, groceries are full of detail.

Why ‘reasonable margin’ is slippery

Every supermarket needs a margin. Staff, transport, rent, refrigeration, spoilage, systems, and basic business costs do not vanish because shoppers are cranky about lettuce. The tricky bit is working out when a margin stops being normal and starts looking excessive.

A short-life specialty item may carry a different margin from long-life milk. A product with five close substitutes may be treated differently from one with very few alternatives. A regional store may have different cost pressures from a metro store. A brand-name product may carry a premium that a plain-label version does not.

That is why the law avoids a simple markup table. It gives the ACCC room to judge the context. For shoppers, that means the law may help over time, but it will not replace the everyday habit of checking whether a price makes sense.

Five signals shoppers can check themselves

You cannot see a supermarket's internal cost data, so you cannot decide whether a product is legally excessive. That is the regulator's job. But you can still spot useful price signals before you buy. Start with these checks.

1. Compare the same or similar product across Coles, Woolworths, and ALDI where prices are available. A big gap is worth noticing.
2. Check recent price history before trusting a special. If the price was almost the same last month, the ticket may be doing more work than the discount.
3. Watch how long a price stays elevated after a promotion ends. A short spike and a long plateau tell different stories.
4. Look for substitutes. If another brand or size is much cheaper, the expensive one may be relying on brand habit rather than real value.
5. Notice timing. Seasonal products, supply disruptions, and temporary ranges can all change what looks reasonable. A normal weekly staple is easier to compare than a limited seasonal item.

Where Discount Trolley fits

Most of those checks are hard to do from memory. You would need to remember last week's price, compare the other supermarkets, and notice whether a promotion is genuinely new. That is a lot to ask while someone is blocking the aisle with a trolley parked sideways. A national sport, apparently.

Discount Trolley helps by putting useful price context in one place. You can search a product and compare current prices across Coles, Woolworths, and ALDI where data is available. You can check recent price history to see whether a special is a real drop or just a loud shelf tag. You can add regular buys to a watchlist and get alerts when prices fall. If you are already in-store, barcode scanning can help you look up available price information on the spot.

For bigger shops, lists and Smart Split can help you see when splitting a shop across stores may be worth considering. The app does not tell you whether a price is legally excessive. It does not cover every item at every store, and it cannot guarantee savings. What it can do is make price checking less of a guessing game.

The new law may put pressure on the biggest supermarkets. Good. But your grocery bill still turns up every week. Until regulators and courts sort out the big questions, the practical move is to check the small ones: what did this cost before, what does it cost elsewhere, and is this special actually worth chasing?

Questions shoppers still ask