Council of Better Business Bureaus Reviews Wal-Mart Price Claims

At the request of the H-E-B Grocery Company, the National Advertising Division of the Council of Better Business Bureaus undertook a review of certain Wal-Mart advertising claims. More to the point, the grocery retailer challenged Wal-Mart’s claims of “unbeatable prices” in addition to its ability to save its customers on average $700 annually if they spend $100 a week at the supermarket on select grocery items.

Specifically, the challenger noted that Wal-Mart does not honor advertisements that require a purchase in order to receive the advertised price or free product, “Buy One/Get One Free” advertisements, double or triple coupons or percent off advertisements, “misprinted” advertised prices, Internet prices or price matches based on other methods of proof, including sales receipts.

The investigation turned up good news and bad news for Wal-Mart. First, the NAD did support the claim of “unbeatable prices,” primarily because it argued that no retailer could be expected to list all limitations in its advertisements. The NAD did, however, suggest Wal-Mart “modify its advertising to make its disclosures substantially more clear and conspicuous in its printed and broadcast advertising and on its in-store signage.”

As for the claim of being able to the save families $700 per year, well, that didn’t go so well.

NAD further recommended that Wal-Mart discontinue the “$700 annual savings” claim. NAD noted that the claim suggests that the consumer watching the ad could save, on average, more than $700 a year by shopping at Wal-Mart. The use of the phrase “on average” does not temper the overriding message that the viewer – wherever he or she is located – can expect to obtain these savings.

In a statement, Wal-Mart stood by its findings, saying they were supported by an in-depth Global Insight study. This isn’t the first time the National Advertising Division has recommended that Wal-Mart discontinue misleading advertising. And as for Global Insight, let’s hold off on calling them a bastion of flawless methodology. That group’s methods have come into question more than once by organizations including the Economic Policy Institute.

Walmart’s unbeatable prices claim scrutinized [Greensboro News & Record]

Walmart’s unbeatable prices claim scrutinized

You’ve probably heard Walmart’s claims of “unbeatable prices.” That includes matching prices of any local competitor’s printed ad for an identical product.

The chain also makes the case in a commercial that on average you can save $700 annually if you spend $100 a week at the supermarket on select grocery items (excluding fresh meat and produce).

Truth or fiction?

The National Advertising Division of the Council of Better Business Bureaus examined those claims. That followed a challenge by H-E-B Grocery Company, L.P., a competing food and drug retailer.

It concluded Walmart could support its unbeatable prices claim, noting “all price-matching programs have terms and limitations, many of which cannot reasonably be expected to be listed in a disclosure,” according to a press release the advertising division released today.

But it did recommend Walmart “modify its advertising to make its disclosures substantially more clear and conspicuous in its printed and broadcast advertising and on its in-store signage.”

The advertising division also recommended Walmart discontinue its “annual savings” claim, although Walmart disagreed the claim could not substantiated.

Walmart, however, says it will take those recommendations into account regarding future advertising.

So, do you get your groceries at Walmart? Are the prices there better than competitors?

Posted by Corey Himrod on Monday, June 22, 2009

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