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Wal-Mart fires back at rivals over ad campaign

A shopper carts her purchases from a Wal-Mart store in Mexico City, April 24, 2012. REUTERS/Edgard Garrido
A shopper carts her purchases from a Wal-Mart store in Mexico City, April 24, 2012. REUTERS/Edgard Garrido

(Reuters) - Wal-Mart Stores Inc has gone on the defensive after some competitors accused the world's largest retailer of using inaccurate information in recent ad campaigns and filed complaints with state legal officials.

The industry leader claims to offer better prices on some products than specific rivals whom it mentions by name in the radio and TV campaign which began running last spring. Wal-Mart stepped up that price-based ad campaign over the holidays.

The move prompted competitors including Best Buy Co Inc and Toys R Us Inc to complain to attorneys general in several U.S. states over the past few weeks.

The news was first reported by the Wall Street Journal on Thursday.

The competitors argue that Wal-Mart's advertisements cross a line by drawing misleading comparisons or promoting products the company does not have in ample supply.

In addition to taking aim at national chains such as Toys R Us and Best Buy, the Wal-Mart campaign has also targeted regional supermarket chains.

A Best Buy spokesman told Reuters on Friday that its legal team has contacted a "handful" of attorneys general in states including Florida, Michigan and Illinois.

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The world's largest consumer electronics chain took issue with a Wal-Mart ad over the holidays that claimed a Dell Inc laptop computer cost an additional $251 at Best Buy.

"They were two very different models, mostly distinguished by design, materials, and specs like back-lit keyboard and battery life, which we know are very important to the customer," Best Buy spokesman Jeff Haydock said.

In a December 20 letter to the Florida attorney general's office, Best Buy's general counsel said "that would be like comparing a Toyota to a Lexus."

The electronics retailer also complained about a promotion related to Apple Inc's iPhone 5 that it said made Best Buy lose "tens of thousands" in profit the day Wal-Mart launched that promotion on Facebook.

A separate letter obtained by Reuters showed that Best Buy reached out to its 40 million loyalty program members on December 10 after noticing Wal-Mart's ads.

In the letter, Shawn Score, the head of Best Buy's U.S. retail business, likened the Wal-Mart ads to misleading political commercials.

Toys R Us said it has complained to Michigan officials about a series of Wal-Mart's ads over the holidays, citing what it claimed were inaccurate prices on playthings including a Fisher-Price toy kitchen and a holiday season-themed Barbie doll.

Toys R Us spokeswoman Kathleen Waugh noted that Michigan's attorney general had investigated a similar campaign by Wal-Mart in the 1990s, resulting in a settlement in which Wal-Mart agreed to drop certain similar practices.

Wal-Mart, however, defended its ad campaign this week.

"We know competitors don't like it when we tell customers to compare prices and see for themselves," Wal-Mart spokesman Steven Restivo told the Wall Street Journal on Thursday. "We are confident on the legal, ethical and methodological standards associated with our price comparison advertisements."

Restivo confirmed to Reuters the accuracy of his comments published by the Journal.

Wal-Mart, which launched the radio and television ads last spring, said the initial ads spurred a 1.2 percent boost in sales at stores open at least a year and a 1.1 percent rise in store visits in areas where those ads were aired, compared with similar regions where they did not run.

(Reporting by Avik Das in Bangalore and Dhanya Skariachan in New York; editing by Matt Driskill and Matthew Lewis)

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