Wegmans Changes Price-Comparison Signs After Costco Complaint

Image courtesy of Tom Simpson

Price-comparison ads at Wegmans will soon be getting a bit of a makeover following an ad watchdog’s suggestion that the grocer modify in-store displays in response to a Costco complaint that the low-cost price comparisons were misleading and false.

The National Advertising Division — an independent industry watchdog administered by the Council of Better Business Bureaus — investigated the complaint leveled at Wegmans by rival Costco, finding that while the price comparisons were accurate, they should clarify that prices are subject to change.

Costco, in a complaint filed with NAD in early February, claimed that Wegmans’ in-store point of sale displays featuring a series of Wegmans’ products listed side-by-side with Costco products, falsely compared the prices.

In each case, the prices displayed indicated that the Wegmans’ products were less expensive. But Costco argued that the price displayed for the Costco product was often false and actually lower than the one displayed for the Wegmans product.

Costco also claimed that Wegmans’ comparisons were misleading because the smaller price comparisons were located under a large signs that read, “Who has time to comparison shop? We do. We check hundreds of prices each week so you don’t have to” or, “Don’t shop around town… Shop at Wegmans and save.”

According to NAD, Wegmans’ provided the watchdog with information on its process for developing in-store, price-comparison advertising, which includes weekly visits to competing stores.

NAD noted in its decision that Wegmans’ current competitor price-checking and posting was in keeping with precedent established by the Federal Trade Commission and NAD, and that one week was a reasonable period of time to check on prices to keep them current.

However, NAD did determine that Wegmans’ should include on the price comparison signs in a clear, prominent manner the date of the comparison shopping and a statement that the costs are subject to change.

NAD also recommended the advertiser compare prices of like items when both parties sell identical products. And where products are not identical, NAD recommended that the point-of-sale display either note that a comparison is not applicable or describe more accurately the products that are being compared.

With respect to the claim, “Don’t shop around town … shop at Wegmans and save,” NAD concluded that the phrase instructing consumers not to comparison shop, directly contradicts the recommended qualifier that prices are subject to change.

In a statement to NAD, Wegmans says it “appreciates, and will comply with, each of the NAD’s helpful recommendations.”

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