In a recent case, Ahold Delhaize USA, operator of a number of grocery store chains, including Food Lion, Hannaford, Stop & Shop, and others, challenged express and implied claims made by its competitor Lidl US, LLC.  Specifically, Ahold challenged Lidl’s price comparison claims in which Lidl promised consumers savings compared to prices at specific Ahold-owned stores. Even if you’re not in the grocery store business, keep reading!  Price comparison claims are ubiquitous in many industries and the learnings here extend beyond fruit! 

As a preliminary matter, NAD addressed a jurisdictional issue raised by Lidl: whether ads targeted at consumers shopping at local grocery stores constitutes “national advertising” for purposes of NAD’s jurisdiction. NAD determined that although the claims were made locally by each store, each of the hundreds of stores across multiple states disseminated substantially similar claims based on the same methodology to generate the price comparisons. Therefore, NAD found that Lidl’s advertising was “national” for purposes of NAD’s review.  No surprise here.

Next, NAD examined the substantiation, focusing first on the relevant time period for conducting the price comparison.  Ahold argued that Lidl’s claims were “stale” because the prices compared were in some instances no longer current by the time the advertising was disseminated. As in an earlier case involving grocery store price comparisons, NAD  recommended that price comparison claims should be based on price checks conducted no more than seven days prior to the ad’s publication. Further, because grocery store prices are so volatile, NAD also recommended that price comparison claims be accompanied by a clear and conspicuous disclosure of the basis and date of the comparison. 

NAD also examined whether Lidl’s price comparison were improperly substantiated because they failed to take into account the discounted prices offered by Ahold’s free loyalty programs.  Ahold argued that since the majority of its customers are members of its loyalty programs and therefore receive reduced prices, Lidl’s price comparisons should be as to those reduced prices.  While NAD did not find that Lidl’s comparisons were unsubstantiated on this basis, it did determine that the fact that the comparison did not take the reduced loyalty program prices into account was material.  Accordingly, NAD recommended that Lidl disclose whether any particular price comparison was as to Ahold’s base price or its discounted member price.

Finally, NAD examined Lidl’s claim that customers will achieve various levels of savings for “the exact same basket” of items.  The issue here was whether consumers would understand this claim literally, i.e., that the items Lidl customers could buy for less would be identical to those they buy at Ahold (for more). Although NAD recognized that the FTC generally requires just comparability as to quality and availability for price comparison claims, rather than identicality, NAD determined that “the exact same” means exactly that to consumers.  Accordingly, since Lidl’s price comparisons were as to comparable rather than identical items, NAD recommended that the claim be discontinued.

The takeaways, which extend beyond the grocery store aisles: 

Price comparison claims must be supported by current, accurate data.  And the time period for the data serving as the basis for the claims must be relevant for the industry in question: the more volatile the prices, the more frequently the price comparison must be validated.  

Such claims must reflect meaningfully comparable products or services.  

You should provide clear, conspicuous disclosures explaining the basis and timing of the comparison, especially where pricing is volatile or context-dependent. 

You should avoid overstating savings by relying on selective or unrepresentative data.

If you use absolute words like “exact same,” “never” or “always” (when they are likely to be understood literally), you will need to substantiate that takeaway, so use them with great care.

Case Report #7514.