The competition watchdog's supermarket report has found customers don't trust "sale price" claims at the grocers.

Transcript

00:00Shoppers like Zach are here at this discount store trying to avoid the major supermarkets.

00:07I don't like shopping at Coles and Woolworths.

00:09Why not?

00:10Because they're too expensive and they've been price gouging us for God knows how long.

00:13The Consumer Watchdog is investigating supermarket pricing and Coles and Woolworths are its biggest targets.

00:20They behave in an oligopolistic fashion, in other words not trying to compete too strongly and mirroring practices.

00:30And that's not a good outcome if that's the case for consumers.

00:34The ACCC has dropped its interim report on the same week it's also lodged action against Coles and Woolworths

00:41alleging that they've been bumping up prices so they can drop them, giving the illusion of discounting.

00:48It is a breach of trust for supermarkets to be behaving like this and today we've released the ACCC interim report.

00:58One former ACCC chair says the report says nothing new.

01:03I'm a bit disappointed.

01:04The critical things are how do we allow Aldi and Costco in particular to enter the market with more vigour

01:13because they've got the capital to do it but they need to be able to enter more vigorously

01:16and the real issue there I think comes down to the availability of sites.

01:20The report does raise concerns about land banking where companies buy up sites and sit on them keeping out their competition.

01:28Woolworths has more than 100 undeveloped sites.

01:32Coles has over 40 while Aldi is sitting on 13.

01:36We cannot just allow the chains to open store after store after store

01:41and I really strongly believe that the government should take this opportunity of introducing a supermarket cap.

01:49The ACCC is now going over five years of price data to find out if the supermarkets are gouging which they say they're not.

01:57I don't think price increases equate to abuse of market power.

02:01Consumer rage about supermarket prices has been growing during a cost of living crisis.

02:07Coles and Woolworths used to be some of Australia's most beloved brands.

02:13Now they are some of the least trusted in the country.

02:16The ACCC will make supermarket bosses front up to their inquiry before releasing a final report next year.