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Speaker 1: Welcome to Ask Fear and Greed, where we take your

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Speaker 1: questions and do our best to answer them. I'm Michael

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Speaker 1: Thompson and good afternoon, Adam Lange.

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Speaker 2: Hello Michael, Adam.

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Speaker 1: Today's question comes from Mark and he shared it via LinkedIn.

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Speaker 1: Marks spoiled for choice. On the ways that he could

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Speaker 1: have sent his question on to us, he could have

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Speaker 1: gone to the website Fear Andgreed dot com, dodau, or

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Speaker 1: he could have gone to Facebook or Instagram or any

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Speaker 1: one of the social media platforms where you'll find Fear

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Speaker 1: and Greed. Instead, he went to LinkedIn, which is just

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Speaker 1: as good. And he said, you've mentioned the Roy Morgan

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Speaker 1: Trust survey five or six times now on social media

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Speaker 1: and on the podcast, which is all fair. And I

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Speaker 1: feel like that's actually aimed at me a little bit

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Speaker 1: because I've been banging on about this for a while now.

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Speaker 1: It was in reference to Cole's and Woolli's going from

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Speaker 1: two of the most trusted brands in Australia to two

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Speaker 1: of the most distrusted brands, and that was before the

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Speaker 1: a Triple C made their claims about Dodgy specials, Dodgy

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Speaker 1: Specials being a great way to characterize the allegations over

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Speaker 1: the last few days a couple of questions from Mark.

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Speaker 1: He says, why does trust matter to a business? You

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Speaker 1: keep talking about it? Why does it matter in the

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Speaker 1: case of Coal's and Woolies And this is an interesting point.

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Speaker 1: We're still going to use them even if we don't

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Speaker 1: trust them. And the bigger question, once trust is broken,

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Speaker 1: can it be restored over to you?

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Speaker 2: Adam.

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Speaker 1: I was going to dive in with my opinion, but

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Speaker 1: you know what I'd rather hear yours well.

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Speaker 2: Challenge at will Michael, But let's look at the A

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Speaker 2: Triple C case first, as I do find this fascinating.

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Speaker 2: The HRIBLEC is alleged that misleading and deceptive pricing occurred

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Speaker 2: across hundreds of products, and they include Australian brand favorites

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Speaker 2: like Tim TAM's and Twisty's and Coca Cola. These promotional

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Speaker 2: pricing practices form part of the brand positioning of Slogan's

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Speaker 2: Coals down Doown or Woolworth's prices dropped and the A

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Speaker 2: Triple C's case rests on the argument that they misled

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Speaker 2: consumers in these instances by artificially inflating prices before offering

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Speaker 2: these so called discounts. So the scale of this investigation

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Speaker 2: is actually one of the things that I found most staggering.

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Speaker 2: The investigation involved two hundred and sixty six products at

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Speaker 2: Will Worse between September twenty twenty one and May twenty three,

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Speaker 2: at Coal's two hundred and forty five products, So not

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Speaker 2: just a few instances here.

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Speaker 1: Adam our colleague, our Fear and Greed colleague, Sean Aylmer

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Speaker 1: went into this in some detail in the Fear and

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Speaker 1: Greed newsletter this week, and the way he kind of

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Speaker 1: spelled it out, it just made it really really clear

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Speaker 1: that the watchdog was claiming that the supermarkets were offering

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Speaker 1: kind of products at a regular price for at least

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Speaker 1: one hundred and eighty days, then they would increase allegedly

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Speaker 1: the price of the product by at least fifteen percent.

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Speaker 1: That was for a relatively short period of time, and

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Speaker 1: then came back down and it went onto the prices

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Speaker 1: dropped or the down down kind of program. But the Oreos,

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Speaker 1: the Oreo example that both the ah Trible c cited

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Speaker 1: and then Sewan included in the newsletter was staggering. This

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Speaker 1: is ridiculous, where they had the Oreo family pack at

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Speaker 1: a for sale a regular price of three dollars fifty

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Speaker 1: for six hundred and ninety six days, and that's all good.

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Speaker 1: The price was then increased to five dollars for twenty

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Speaker 1: two days, and then and then the product was placed

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Speaker 1: on a price has dropped promotion with the ticket showing

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Speaker 1: a new price of four dollars fifty and I was

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Speaker 1: price of five dollars, so allegedly a saving of fifty cents.

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Speaker 1: Never mind the fact, never mind the fact that that

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Speaker 1: was still a dollar more than it was for those

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Speaker 1: six hundred ninety six days. That the numbers here are ridiculous.

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Speaker 2: Yeah, it's made fairly plain the way the A trible

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Speaker 2: C is structured at it really does lay out a case.

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Speaker 2: Now these are allegations, but you'd have to say it's

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Speaker 2: going to the federal court and it's going to be

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Speaker 2: a hefty couple of cases. Michael. You watch shopping prices,

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Speaker 2: I do too. We're looking for the specials. It's part

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Speaker 2: of gaming, but it's also part of making your family

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Speaker 2: budget go further. And it's often that the questions first

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Speaker 2: come from customers, and those pricing movements were noticed by

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Speaker 2: very sharp eyed people in increasing instances. Concerns were often

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Speaker 2: on social media and that includes Reddit, and many of

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Speaker 2: them post increasingly pointed questions. Now to the issue here

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Speaker 2: about trust trust.

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Speaker 1: I was about to ask you this. I was about

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Speaker 1: to I was about to say, not saying that we're

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Speaker 1: getting off track here.

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Speaker 2: Well, this is Mark's question, isn't it? Where does this?

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Speaker 1: Because that seems pretty obvious to me that if a

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Speaker 1: customer is going through and looking at the price tags

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Speaker 1: and seeing that this is happening, and they know what

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Speaker 1: they were paying for that same product two months ago,

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Speaker 1: and now they're seeing and advertised that a special that's

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Speaker 1: actually higher than what they were paying two months ago,

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Speaker 1: there is a breach of trust there. But why does

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Speaker 1: that matter?

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Speaker 2: Okay? So well, I think trust is basically the same

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Speaker 2: for people as it is for brands. So if you

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Speaker 2: break it down, people achieve trust through competence, character and care,

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Speaker 2: and I think the same could be true for brands,

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Speaker 2: and both these things people and brands. Trust gets tested

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Speaker 2: under pressure and that's where trust counts the modest But

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Speaker 2: let me ask you a question, Michael, do you go

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Speaker 2: to Bunnings for your hardware needs?

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Speaker 1: Yes? Yes I do?

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Speaker 2: And why why do you go to Bunnings.

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Speaker 1: It's largely because of price, it is largely because of convenience,

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Speaker 1: but it is also because I get good advice and

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Speaker 1: I trust what they are telling me. And I have

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Speaker 1: made some very good whipper snipper related purchases based on

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Speaker 1: the advice that I had from a very knowledgeable gentleman

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Speaker 1: in the lawn care aisle.

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Speaker 2: Now you're a very keen gardener and lawn care and Michael,

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Speaker 2: I would say too. Do you also know that Bunnings

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Speaker 2: has a price guarantee If you find it cheaper anywhere else,

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Speaker 2: Bunnings will match it.

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Speaker 1: I have seen their signs up about that, and that

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Speaker 1: actually allows me to trust that I'm getting value.

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Speaker 2: Okay, And what about Aldi? Do you go to Aldi?

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Speaker 1: I do, yes. I buy their Logics dish washing tablets, Adam,

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Speaker 1: the Logics Platinum dish washing tablets. That's my hot tip

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Speaker 1: for today.

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Speaker 2: Single item shop.

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Speaker 1: Often it is because we're out of Logics dish washing tablets.

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Speaker 1: They are the best dish washing tablets you can buy.

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Speaker 2: And maybe a cheeky little bottle of high value pino

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Speaker 2: along the way out.

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Speaker 1: Well, now we know a little bit about your shopping patterns, Madam,

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Speaker 1: I'm there for the dish washing tablets. You're there to

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Speaker 1: stuck up on cheap grog.

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Speaker 2: Okay, so this goes to trust in my mind, And

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Speaker 2: so what do you think happens when the a trip

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Speaker 2: will see alleges that two of the biggest brands in

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Speaker 2: Australia engaged in deceptive discounting practices to their customers. Especially

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Speaker 2: when that allegation is made during a very high cost

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Speaker 2: of living environment.

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Speaker 1: That is not going to be good.

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Speaker 2: It's not, it's not.

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Speaker 1: But is it going to stop people shopping there? Because

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Speaker 1: am I going to go to IgA where it's going

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Speaker 1: to be more expensive? Well?

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Speaker 2: Maybe, and this is really important for Mark's question, but

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Speaker 2: look at what's happened with Optus and Quantus in the

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Speaker 2: last year or so with their brand trust. It has

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Speaker 2: had a material impact on their turnover. So in this

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Speaker 2: instance with Coals and Woolies, the fines that I mentioned

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Speaker 2: are only one of the potential penalties. On an expense basis,

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Speaker 2: Coals and Woolworths will also have to invest board in

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Speaker 2: executive time, staff, energy and money in the legal costs

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Speaker 2: of this defense. They will spend company resources on all

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Speaker 2: the legalities, while the adverse online chatter continues, and they're

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Speaker 2: probably supermarket floor staff cop pricing questions and the occasional

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Speaker 2: sly remark. So fines are only part of the cost.

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Speaker 2: You've also got the brand damage. And if we look

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Speaker 2: at what's happened with Optus and Quantus and extrapolate that

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Speaker 2: to Coals and Woolies in the last year, their brands

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Speaker 2: too have achieved really strong falls in the brand trust

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Speaker 2: me to buy Roy Morgan, and it started to impact

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Speaker 2: their top line and it's probably going to affect their

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Speaker 2: company performance. So to me, trust in brands matters to

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Speaker 2: turn over. Trust is an economic driver.

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Speaker 1: And look, I suppose when you do then have competitors

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Speaker 1: like Aldi that do actually compete on price and in

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Speaker 1: many cases are in fact cheaper, then maybe there is

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Speaker 1: an alternative for people and if they are going to

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Speaker 1: the company that they feel that they can trust, when

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Speaker 1: you look at Aldi, which is higher in that trust

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Speaker 1: ranking as we saw from the Roy Morgan trust survey,

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Speaker 1: that maybe that will be enough to get them across

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Speaker 1: there because I won't be paying any particular kind of

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Speaker 1: price penalty by going over there. The other question that

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Speaker 1: Mark asked, and we are running out of time, which

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Speaker 1: is not surprising because we like to be comprehensive.

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Speaker 2: We you the Royal way. Yeah.

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Speaker 1: Indeed, once trust is broken, can it be restored? Ken

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Speaker 1: Coles and will rebuild trust with Australian consumers?

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Speaker 2: Yeah they can. And look, I would argue rather than

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Speaker 2: pursue defense through the federal court, I think that is

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Speaker 2: a known path to cost you a lot of money, time,

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Speaker 2: money and oxygen on fighting this in the federal court.

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Speaker 2: Imagine this will take not just weeks or months, It

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Speaker 2: could take a very long time. And that whole time

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Speaker 2: that's happening, your brand is being questioned by people over

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Speaker 2: what you did, and it's keeping the topic alive. I

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Speaker 2: would say another option, potentially is just negotiate with the

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Speaker 2: A triple C. Look at the remedies, look at the penalties,

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Speaker 2: make good with your customers, tell your staff what you're doing,

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Speaker 2: and get back to building the brand as quickly as

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Speaker 2: you can.

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Speaker 1: Bring out a new range of ushies, make sure yep

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Speaker 1: oreos at a fair price, Kim Tam, and actually do

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Speaker 1: what you say you're going to do.

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Speaker 2: Funny, that isn't it. Trust Do what you say you're

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Speaker 2: going to do.

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Speaker 1: Oh it feels like we could have made this about

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Speaker 1: a two minute episode if we just started with that.

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Speaker 1: Thank you Adam, and thank you to Mark as well.

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Speaker 2: Yeah, I hope he's not sorry.

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Speaker 1: He asked, Well, he got what he deserved.

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Speaker 2: He asked a multi part question and he got a

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Speaker 2: comprehensive answer.

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Speaker 1: Indeed, Thank you very much, Adam.

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Speaker 2: Thank you, Michael.

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Speaker 1: Remember, if you've got something you would like to know,

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Speaker 1: then please send through your question on LinkedIn, Instagram, Facebook

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Speaker 1: or Fearing Greed dot com dot a. You are Michael

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Speaker 1: Thompson and this is asked Fear and Greed