USA: Target Sues Kmart For 'False' Ads
Target Corporation is filing a lawsuit today in US District Court in Minnesota charging Kmart Corporation with perpetrating a nationwide false advertising campaign. A leading market research firm audited Kmart's "Dare to Compare" advertising and found that 74 per cent of Kmart's advertised price comparisons were wrong.
Kmart's "Dare to Compare" campaign uses in-store signs to promote Kmart's prices on different products and to compare Kmart's prices to those at other retailers, including Target.
Before filing the lawsuit, Target notified Kmart of overwhelming errors in its comparisons to Target. When Kmart continued to promote false price comparisons, Target retained an independent market research firm to document the scope of the errors.
"An astounding number of the signs have the wrong Target price, regularly misstate Kmart's own prices and often make comparisons on items that the competing Target store does not even sell. These errors have occurred nationwide," said James T. Hale, executive vice president and general counsel for Target Corporation.
"Price competition is in the consumer's best interest and Target is very aggressive in delivering quality merchandise at low prices," said Hale.
"But the first priority of any retailer ought to be to treat the guest with respect. False advertising hurts every retailer by undermining consumer confidence in all advertising. An advertising campaign with a 74 per cent error rate is beyond comprehension."
Target's suit charges Kmart with violating the federal Lanham Act, which governs truth in advertising and Minnesota's consumer protection laws.
Leo J. Shapiro and Associates, a US-based market research company, conducted the audit of Kmart's price comparisons. The audit encompassed 98 Kmart stores in five markets: Atlanta, Detroit, Los Angeles, Miami and Minneapolis-St. Paul.
"Kmart is lying to consumers. Its 'Dare to Compare' advertising is based on deceit," said Hale. "Having ignored the responsibility to be honest with consumers, Kmart now should be held accountable for its reprehensible behavior," said Hale.
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Companies: Sears Holdings Corporation
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