This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Wal-Mart's Price Savvy Ad Campaigns Strike A Nerve

Stocks in this article: BBY TGT WMT

Wal-Mart’s (WMT) claim to fame is centered on its status as a rock bottom retailer, providing the lowest prices for consumers across America. However, some notable competitors are publicly lashing out at the company for what they believe to be misleading and unethical advertising that has taken place over the past year.

In at least two states, Michigan and Florida, attorneys-general have been contacted by competitors imploring them to investigate whether or not Wal-Mart’s low price claims are valid.  After two years of declining sales, Wal-Mart began running an advertising campaign during the spring of last year reemphasizing the low prices it can offer consumers. By being able to identify competitors’ prices and turn them into advertisements in short order, the company was essentially able to differentiate itself from the competition in real time. It claims that sales were up 1.2% in the regions where the ads ran over regions where the ads were not aired.

After being publicly admonished for charging higher prices, it is not surprising that competitors would be frustrated with Wal-Mart’s tactics. However, taking matters to state consumer protection agencies is a step not often seen in retail. Best Buy (BBY), for example, claims that because of its price match guarantee it was forced to lower prices on certain items despite Wal-Mart not having sufficient stock of these items in their stores. Best Buy claims this cost them company millions of dollars in sales over the holiday period. Additionally, they believe that Wal-Mart was not comparing like products in many of their advertisements, claiming to offer lower prices for entirely different, and in many cases inferior, products. Wal-Mart defended its ad campaign on Thursday however, with a spokesman saying, “We are confident on the legal, ethical and methodological standards associated with our price comparison advertisements.”

What does this mean for Wal-Mart and other companies in the field? This is not the first time the brand finds itself in hot water over this type of price comparison advertising, as Target (TGT) accused them of similar behavior in the 1990s. Wal-Mart ultimately changed some of their ads after that claim.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs