Katie Marsal
Best Buy and other retailers have complained to attorneys general in numerous states, accusing Walmart of misleading advertising in the holiday shopping season, including a discount on Apple's iPhone 5.
Joining Best Buy were Toys R Us and a number of regional supermarket chains in accusing Walmart of inaccurate prices and false advertising, according to The Wall Street Journal. In particular, Best Buy was bothered by a sale in which Walmart sold Apple's 16-gigabyte iPhone 5 for $150, or nearly $50 off its regular $199 price.
Best Buy has reportedly claimed it lost about $65,000 in profit on the day Walmart advertised its iPhone 5 promotion on Facebook. Best Buy says it was forced to match Walmart's advertised price, even though the retailer claims Walmart did not have enough iPhone 5 inventory to meet demand.
For its part, Walmart has claimed its stores were 98 percent in stock of the iPhone when the promotion ran.
Beyond the iPhone 5, Best Buy also alleges that Walmart unfairly compared two different Dell laptop models in a holiday ad. According to Best Buy, Walmart showed off a more expensive Dell laptop model and claimed it cost an additional $251 at Best Buy. Walmart denies the claims.
Toys R Us also complained about a number of Walmart sales, including a toy kitchen set from Fischer Price, a Barbie doll from Mattel, and a Razor kick scooter.
Walmart has routinely offered discounts on the Apple products it carries, including the iPhone. America's largest retailer is known for relying on low-margin, high-volume sales, and also for pushing "loss leader" promotions that bring customers into stores and squeeze out competitors.
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54 Comments
"For its part, Walmart has claimed its stores were 98 percent in stock of the iPhone when the promotion ran." I wonder what that means. That 98% of Walmart stores had what, at least one iPhone in stock? That they had normal, i.e. non-sale price, stock levels?
This is not even worth writing about. Best Buy will be out of business soon.
At least in Canada, Best Buy won't price match any competitor if the item isn't in stock at the time of purchase. They've always called up the closest store to check if they have inventory or if the website shows inventory free shipping. More iPhones sold at the expense of BestBuy
[quote name="davebarnes" url="/t/155310/best-buy-accuses-walmart-of-misleading-damaging-holiday-iphone-5-sale#post_2254122"]This is not even worth writing about. Best Buy will be out of business soon.[/quote] It is definitely worth writing about. It's not about Best Buy, it's about Walmart's use of its massive market power to disrupt the markets and put smaller companies out of business. In our thirst for ever cheaper products, we've created a monster. It has already largely destroyed Main Street, USA. It is well on its way to destroying even major competitors. And it has done enormous damage to our national economy (at one point, something like 30% of all products on Walmart shelves came from China). A manufacturer has no choice but to deal with Walmart and accept their draconian supply requirements. And, in the end, what do we get? Lots of minimum wage jobs with no benefits, no security, and violation of equal protection laws. But at least we get to buy cheap stuff. :\
[quote name="OriginalG" url="/t/155310/best-buy-accuses-walmart-of-misleading-damaging-holiday-iphone-5-sale#post_2254127"]At least in Canada, Best Buy won't price match any competitor if the item isn't in stock at the time of purchase. They've always called up the closest store to check if they have inventory or if the website shows inventory free shipping. More iPhones sold at the expense of BestBuy [/quote] I believe that's technically true in the U.S, as well, but I don't think the procedure is always followed. A busy sales rep is likely to just accept the competitor's ad without checking when there's a line of customers a mile long all waiting for service.