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Winning Group responds to price gouging claims

Choice has uncovered significant price hikes on pandemic-related items such as face masks and hand sanitisers, as well as bigger ticket items like freezers, just before the nation went into lockdown.

The consumer advocacy group highlighted an example on Winning Appliances where the price of a 237-litre vertical freezer jumped 37% on March 19 from $2,085 to $2,850 and remained at the higher price until early April. Choice analysis showed that the biggest previous price jump for the freezer was 10%.

On Appliances Online, the price of a 198-litre chest freezer increased by 53% on 22 February from $327 to $499, with the price of another vertical freezer increasing 25% on 19 March 2020 from $3,032 to $3,790.

Choice campaign and policy adviser, Amy Pereira said there are currently no permanent laws to stop businesses hiking prices by unreasonable amounts to take advantage of a crisis – and there should be.

“Choice is calling for law reform to cap prices on all essential goods for any crisis we face. Our investigation confirms what our members told Choice during lockdown: some companies hiked prices dramatically at the exact time when people needed their help,” she said.

Laws against price gouging that took effect on 31 March 2020 make it a crime to add more than 20% mark-up to any essential item related to COVID-19 protection including face masks, hand sanitisers, disposable gloves, alcohol wipes and other products that help to prevent the spread of the virus.

However, the legislation is temporary, ending on 17 September 2020, unless extended by the governor-general.

[Photo Credit: Choice]

John Winning responds to Choice findings

In response to Choice’s findings, Winning Group CEO, John Winning said prices at Appliances Online and Winning Appliances are determined by an algorithm and are not set manually, and therefore claims that the retailer has not engaged in any form of price gouging.

“The algorithmic pricing is determined by a combination of factors, including currency exchange rates and the manufacturers product costs. None of these factors were altered during the COVID months,” Winning said.

“During the height of COVID-19 and with people spending more time at home, there were categories that became popular. The assertion that a price increase is due to popularity alone is simply incorrect. For instance, in April stand mixers were as popular as freezers, and in that month, prices of the top selling stand mixers on Appliances Online fell and were the lowest in the market at that time.

“We aim to provide an exceptional customer experience for each and every customer, by going above and beyond and part of that service and experience is that we offer a price match guarantee. So if a customer finds one of our products cheaper with any other Australian retailer, then we promise to match it.

“We are a 114-year old, fourth generation family business and our company mission is to provide the best shopping experience in the world and we measure our customer satisfaction by Net Promoter Score. The global average of NPS for online retail is 24 and for offline retail it is 14. At the Winning Group in March, our NPS was 82.2 and in April 81.6. We have not engaged in any form of price gouging and any suggestion that we had, would be incorrect.”

Choice tracked daily retailer prices for a six-month period from October 2019 to late March 2020 and singled out price hikes of 20% or more from 15 February 2020.

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