SAN FRANCISCO, June 22 (Reuters) - Wal-Mart Stores Inc (WMT.N) needs to make its price-matching policies clearer and stop claiming in a television commercial that viewers can save more than $700 a year buying groceries in its stores, an advertising industry self-regulating group said on Monday.
The National Advertising Division of the Council of Better Business Bureaus said it examined Wal-Mart’s ads after competing food retailer H-E-B Grocery Co challenged the discount retailer’s claims.
H-E-B said Wal-Mart’s ads touting “Unbeatable Prices” were interpreted by consumers as a lowest price guarantee, but Wal-Mart’s disclaimer failed to fully reveal limitations on its price-matching program.
H-E-B also challenged a Wal-Mart ad telling consumers that if they spent $100 a week on groceries at a supermarket, “you could save on average over $700 a year” by buying those kinds of groceries at Wal-Mart.
After studying the ads, NAD said that while Wal-Mart, the largest U.S. grocery seller, could support its “Unbeatable Prices” advertising claims, it should make its price-matching disclosures “substantially more clear and conspicuous” in ads where it uses the “Unbeatable” claim.
NAD also said that Wal-Mart’s claim of $700 in grocery savings “was not supported by the evidence in the record” and should be discontinued.
While the Wal-Mart ad cites a cost comparison study by Global Insight, NAD said there was a “significant disconnect” between the study and the claim made in the commercial.
“In the challenged commercial, Wal-Mart promises ‘you,’ i.e. the individual watching the commercial, that ‘you’ could save, on average, over $700 a year by shopping at Wal-Mart,” NAD said in its report.
But NAD said the “Global Insight Study cannot support this message, as it concerns a national average. The competitive landscape of grocers varies largely throughout the nation.”
Wal-Mart said it disagreed that its $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,” Wal-Mart said in a statement.
The retailer said it would take NAD’s recommendations into account in future advertising. (Reporting by Nicole Maestri, editing by Matthew Lewis)