Rivals: Walmart Plays Loose With the Truth
Best Buy, Toys "R" Us and a number of regional supermarket chains have filed complaints in several states against Walmart over the accuracy of its price-comparison ads. Competitors say products aren’t always identical or available, but Walmart defends its ads as accurate. The news was first reported by The Wall Street Journal.
Best Buy reportedly complained to attorney generals in Florida, Illinois, Michigan and New Jersey. In its complaint to Florida’s attorney general, the electronics retailer claimed a Dell laptop advertised in a Walmart ad as $251 less expensive than Best Buy wasn’t the same laptop. The complaint likened the ad to "comparing a Toyota to a Lexus."
Best Buy also claimed it lost about $65,000 in profit the day Walmart’s promotion on the iPhone 5 first ran on Facebook. It matched the deal’s prices although Best Buy claimed Walmart didn’t have sufficient iPhones available.
Toys "R" Us likewise complained to attorney general offices across multiple states that Walmart was advertising out-of-stock deals and prices in Walmart’s stores were often higher than advertised ones.
In a statement, Walmart spokesman Steven Restivo said all local, state and federal rules and regulations were followed and under-stocks weren’t an issue. He added, "We know competitors don’t like it when we tell customers to compare prices and see for themselves, but we think consumers deserve every chance to find value."
Walmart began its "Market Basket Challenge" price-comparison ads against regional grocers earlier in the year to reinforce its discount reputation and extended it to a national ad blitz targeting Best Buy and Toys "R" Us during the holidays. Regional grocers had also filed complaints across multiple states, Walmart admitted.
In the grocery channel, some competitors have also responded with local campaigns. Publix has run weekly comparison ads touting, "Walmart doesn’t always have the lowest price."
One radio ad for Pick ‘n Save stated, "If you’d rather feed your family good food made fresh instead of just cheap food, there’s no comparison to Pick ‘n Save."
Market observers said it’s rare to call out competitors by name in advertisements and to take complaints to state consumer-protection regulators. The Journal article also noted that Walmart in 1994 agreed to stop comparing products that weren’t identical without highlighting the differences as part of a resolution of a legal dispute with Target.
- Rivals Object to Walmart Ads – The Wall Street Journal
- Best Buy and Toys ‘R’ Us Say Walmart’s Price Compare Ads Deceived – Bloomberg News
- Legal Challenges to the "Walmart Challenge" – Coupons in the News
- Walmart V. Harris Teeter in Carolina – RetailWire
- Walmart is Further Putting the Screws to Grocery Chains: But Guess Who Benefits – Forbes
What are pros and cons of price-comparison ads? How should stores facing price-comparison callouts respond?