Wal-Mart can say its prices are unbeatable, but its annual savings claim has got to go, or so said The National Advertising Division of the Council of Better Business Bureaus (NAD) when they were asked to review the ads by H-E-B Grocery Co. L.P., a competing food and drug retailers.
NAD, the advertising industry’s self-regulatory forum, determined Wal-Mart Stores Inc. provided reasonable support for the company’s “Unbeatable Prices,” advertising claims, although it said the retailer modify the accompanying disclosure.
H-E-B had challenged Wal-Mart on a number of claims including its “Unbeatable Prices” advertisement (along with the disclosure: “We’ll match the price of any local competitor’s printed ad for an identical product. See manager for restrictions.”) The claim was featured on in-store signs and in television, radio and print advertising.
In addition, H-E-B also challenged the claim “Let’s say you spend $100 a week at the supermarket on these kinds of items. If you bought these kinds of groceries at Wal-Mart, you could save on average over $700 a year. What would you do with all that money? Save money. Live better. Wal-Mart.”
H-E-B argued consumers understand Wal-Mart’s “unbeatable prices” advertisement to mean it has the lowest prices and argued that the disclaimer fails to reveal several significant limitations.
Specifically, H-E-B Grocery noted 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.
After reviewing the information, NAD determined Wal-Mart could support its “Unbeatable Prices” claim. NAD noted that all price-matching programs have terms and limitations, many of which cannot reasonably be listed in a disclosure. NAD did recommend, however, that Wal-Mart modify its advertising, so that its disclosures are much more clear to consumers and noticeable in its printed and broadcast advertising, as well as on its in-store signage.
NAD also recommended that Wal-Mart discontinue its “$700 annual savings” claim. NAD noted that the claim suggests consumers watching the ad could save, on average, more than $700 a year by shopping at Wal-Mart. The phrase “on average” does not change the main message viewers get when watching the ad-that they can expect to obtain these savings. NAD also determined the message is unchanged despite the script that appears briefly at the bottom of the screen, which reads: “8/15/08 Global Insight, Inc. U.S. Cost Comparison Study based on 2007 sales of packaged foods by category; excludes fresh meat, produce and other random weight items. Local savings vary.”
“The statement, ‘local savings may vary,’ does not dispel the overriding impression that ‘you’ the viewer can obtain the suggested savings,” NAD noted.
Wal-Mart, in its advertiser’s statement, said the company disagreed “that our $700 grocery savings claim was not adequately substantiated. Although we are not currently running this particular spot, we firmly believe that this claim is well-supported by the Global Insight study, and that the advertising clearly communicated the claim and the basis for the claim.”
However, Wal-Mart said it will take “NAD’s recommendations regarding these claims into account in future advertising.”