A grocery store chain should discontinue comparative pricing claims, the National Advertising Division recommended in a new decision, finding the accompanying disclosures to be too vague and nonspecific.
HEB Grocery Company challenged claims made in print and YouTube advertising by Aldi Inc. touting its low prices, such as “Receipts don’t lie. Save up to 51% shopping at Aldi.” and “Move over HEB, Kroger, and Walmart. We’re the low price leader in this town. Save up to 50% shopping at Aldi.”
Aldi told the self-regulatory body the comparative price claims were limited to the Houston area and not national in scope, placing them outside the NAD’s jurisdiction. Further, the claims were truthful and accurate, the advertiser said, with a disclosure that clearly identified the basis for comparison in its advertising of Aldi-brand products versus national brands sold at competing grocers that were comparable in size, quality and ingredients.
While the NAD recognized the importance of grocery stores informing consumers that they can save money by purchasing high-quality products at lower prices, the decision disagreed with both of the advertiser’s arguments.
First, the NAD determined it had jurisdiction over the dispute, noting in its reply letter that HEB identified Aldi pricing claims that appeared on YouTube in addition to the print advertising found in Texas. That meant the challenged advertising “has the purpose of inducing a sale or other commercial transaction and has been disseminated to a sufficiently substantial portion of the United States,” according to the decision.
Turning to the merits of the claims, the NAD found that one message reasonably conveyed by the advertisements was that consumers who shop at Aldi will always save up to 50 percent (or a significant dollar savings) by purchasing Aldi-brand products versus brand-name products at HEB and competing grocers.
The disclosures, “when actually present, are vague,” the NAD wrote, and do not specify “(1) what the referenced comparable products (brand name or otherwise) are; (2) whether the products compared are based on reliable consumer habits and purchasing studies to indicate that the products selected are representative; or (3) what percentage of the inventory of the particular store the chosen products represent.”
For example, the NAD noted that Aldi’s YouTube video made comparative references to fresh produce—despite the fact that produce does not form the basis of the advertiser’s price comparison. “Consequently, NAD determined that the evidence in the record failed to demonstrate that the products chosen by the advertiser as the basis of comparison are sufficiently representative to support Aldi’s broad store-wide savings claims,” according to the decision.
The NAD recommended the advertiser discontinue the challenged YouTube ads, avoid featuring unqualified savings claims in future advertisements and stop running all the challenged qualified savings claims.
In addition, Aldi should “ensure that future price comparisons clearly define the basis of comparison, are limited based on the scope of the comparison, and where the comparison made is to competing grocers who also have private-label products, avoid the implication that the comparison being made is to a competitor’s private-label product or that the competitor does not make a private-label product.”
Aldi disagreed that its comparative advertising was vague and/or unsubstantiated, but agreed to comply with the NAD’s recommendations for future ads. However, the advertiser indicated its intention to appeal the jurisdictional part of the decision to the National Advertising Review Board.
“Aldi’s challenged advertising campaign was directed at and distributed to consumers through print and email to a small geographic area around Houston, Texas comprising approximately 1% of the U.S. population,” the company said in its advertiser’s statement. “The [YouTube] videos were not mentioned in HEB’s complaint or the NAD’s letter transmitting the complaint and were mentioned for the first time in HEB’s reply.”
To read the NAD’s press release about the decision, click here.
Why it matters: The NAD’s decision provides a helpful reminder to advertisers about making comparative pricing claims, from ensuring they clearly define the basis of comparison to limiting the claim based on the scope of the comparison to endeavoring to make clear, conspicuous disclosures that appear in proximity to the claim being qualified.