Stop & Shop, A&P in Ad Fracas

WHITE PLAINS, N.Y. — Price wars between supermarkets are tumbling off the shelves and into courtrooms. In a case illustrating the seriousness with which rival retailers are courting shoppers with a price message, A&P has accused Stop & Shop of running misleading comparative price advertisements that harm the public image and goodwill of A&P and should be pulled, according to a District Court filing

WHITE PLAINS, N.Y. — Price wars between supermarkets are tumbling off the shelves and into courtrooms.

In a case illustrating the seriousness with which rival retailers are courting shoppers with a price message, A&P [4] has accused Stop & Shop [5] of running misleading comparative price advertisements that “harm the public image and goodwill” of A&P and should be pulled, according to a District Court filing here. Quincy, Mass.-based Stop & Shop in a response last week said A&P, based in Montvale, N.J., was in fact guilty of “insidious and defamatory” ads, and detailed a series of escalating price-claim tangles between the companies.

The suit emerged from a series of ads run by Stop & Shop claiming that customers “can save money every time they shop” at Stop & Shop vs. competitors. It uses prices on a basket of identical items at Stop & Shop and at a local rival in printed circulars and in-store displays. A&P's suit claimed that ads highlighting pricing differences between Stop & Shop stores and A&P locations in Ossining, N.Y., and in Yonkers, N.Y., were false and misleading because they contained false prices, misleading artwork and were based on purchase orders that could not be found at A&P on the dates indicated.

Stop & Shop in a strongly worded response last week dismissed claims that its ads were false and argued that “the motivation behind A&P's motion is not to enjoin false and misleading advertising,” but rather “is just the latest in a series of attempts by A&P to impermissibly prevent Stop & Shop from engaging in truthful, accurate speech. … A&P seeks to restrict this speech so it may obtain a competitive advantage in the marketplace and charge its customers higher prices.”

According to Stop & Shop, disputes between the retailers began earlier this year when A&P's lawyers informed Stop & Shop that its “Compare and Save” campaign that highlighted shelf-price differences between it and rivals on individual items in the store was inaccurate and in violation of the Lanham Act governing false advertising claims.

Stop & Shop said it investigated the claims but determined they were accurate.

In June, A&P responded with newspaper advertisements informing shoppers, “You can't trust Stop & Shop's price comparisons” and “Stop & Shop's price comparisons: We think you are smart enough to know better.”

Stop & Shop subsequently moved on to a testimonial program highlighting differences in the price of identical baskets of goods. This response drew A&P's lawsuit.

Stop & Shop said it employed an outside firm, Witan, to recruit shoppers at three stores. Witan representatives then shopped a rival A&P for the same items and published ads declaring “Diane Saved 19% at Stop & Shop” at the Ossining store and “Eileen saved 9%” in Yonkers.