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WAL-MART'S "ALWAYS THE LOW PRICE" RETAILING CLAIM UPHELD BY NAD

This article was originally published in The Tan Sheet

Executive Summary

WAL-MART'S "ALWAYS THE LOW PRICE" RETAILING CLAIM UPHELD BY NAD, according to a November Case Report issued by the National Advertising Division (NAD) of the Council of Better Business Bureaus. NAD determined that Wal-Mart's "Always the low price. Always" claim is "a slogan meant to convey stability and dependability in pricing" and is "consistent with [Wal-Mart's] general low-price policy." The Wal-Mart claim was challenged by the National Advertising Review Network of the local Better Business Bureaus and competitors including Target Stores and Pace Membership Warehouse, who alleged that the Wal-Mart slogan misled consumers into believing that Wal-Mart is always "selling at the lowest prices," NAD summarized. While the challengers argued that "the use of the words 'the low' is the equivalent of the words 'the lowest' and presented "an analysis of English usage" in support of their argument, NAD concluded that the "English usage argument . . . was not relevant" and that "there is no evidence that consumers perceive . . . anything more than that Wal-Mart has a policy of generally low prices." In supporting its slogan, Wal-Mart likened the claim to "Always a low price" or "Always low prices," and maintained that "the Wal-Mart price will always be a low price for the product," the NAD report says. Wal-Mart's practice of displaying in-store price comparisons was also challenged. Although the retailer has since discontinued in-store price comparisons, Wal-Mart agreed to "follow certain principles" outlined by NAD if it planned to it engage in comparative price advertising" in the future, NAD said. The principles suggested by NAD included that Wal-Mart will "verify immediately prior to making any advertised comparison that the compared price does not exceed the price at which the named competitors have been selling the identical merchandise." If the merchandise is comparable, Wal-Mart would "abide by the standards set out above and will verify that the merchandise is similar in all respects, with the same brand name if product has a name brand, and of at least like grade and quality," NAD said. After Wal-Mart has verified its competitors' prices and substantiated its comparisons, it will check the accuracy of its comparative advertising "one week after its comparison is initially verified and each week thereafter as long as the comparison continues. The comparison will be dated," according to NAD. In addition, "to the extent that the advertised price is not a regular price, Wal-Mart will disclose the fact that it is a special price and the duration of such a price," NAD summarized. The complaint against Wal-Mart charged that the retailer's comparative advertising displays "(1) inaccurately depicted the competitor's prices; (2) represented products the competitors did not carry; (3) compared unlike products; and (4) were left on the shelves long after the competitors lowered their prices," the NAD report said. In a statement on the NAD decision, Wal-Mart noted that "others in the industry have used, and continue to use, variants on our 'Always' theme." Regarding its in-store price comparisons, Wal-Mart said that it was its "corporate policy in the past to comply with applicable comparison price advertising guidelines. Should we resume the now-discontinued comparisons, we will instruct our store personnel to comply with applicable guidelines as construed by NAD," the retailer said.
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