Supermarket Accuses Wal-Mart of Stealing Price Information

[losdiablosgato]

SKIATOOK, Okla. (June 15, 2005) - The owners of the Super H grocery store here have filed suit against Wal-Mart Stores, saying the Bentonville, Ark.-based mass merchant sent employees from a neighboring Wal-Mart store into Super H to scan its shelf bar codes. Greg McNeil, general manager of Super H, told SN he confiscated a bar code scanner from a Wal-Mart employee — “wearing a blue smock and name tag,” he said — and turned it over to local police, who, under the order of a District Court judge, are withholding the device from Wal-Mart. According to Steve Peters, a Tulsa-based attorney representing Super H, the retailer is charging Wal-Mart with trespassing and theft of proprietary information. At a hearing next week, Super H will ask a judge to allow it to see what information the scanner may have taken from Super H, Peters said. In a prepared statement, Wal-Mart said, "It is not uncommon for retailers, including Wal-Mart, to prices of comparable items at other retailers in town. In fact, on the very day that the alleged incident occurred, Super H also visited Wal-Mart to compare prices. Wal-Mart did not violate the law, and will vigorously defend this lawsuit."

Jon Springer

http://www.supermarketnews.com/ViewStories.cfm#8390

[skooooo]

1. Wal-gate!!!

[meganmonkey]

2. How stupid!

Wearing uniforms? Using a scanner?

:rofl:

Stores "shop" at other places to check out the competitor's prices all the time. They usually aren't so damn obvious! Morans!

[losdiablosgato]

3. It maybe legal, but dang

This is going to a new low. Even for Chairman Mao's General Store.

[cascadiance]

13. Had to oblige your reference! :)

[Boredtodeath]

4. Happens every day in this county

At every retail store. I know a WalMart employee who's sole job responsibility is to "comp" prices at competing stores every day.

on edit:
And, yes, the WalMart employee wears his "uniform" and introduces himself to the store employees where he is "comping prices."

[central scrutinizer]

5. I'm no fan of Walmart

but this is ridiculous - how can publicly posted prices be proprietary information? I see comparison shoppers at my local grocery all the time typing of scanning data.

[RPM]

24. agreed - no expectation of privacy in a UPC code...

its there for easy use of all parties throughout the supply chain.

[Bozita]

6. Walmart only wants to cut its prices enough to kill off the supermarket

[losdiablosgato]

7. That is Chairman Mao's General Store SOP

[Gays_R_Family]

8. scanning the barcode seems unusual ...

I used to work at a hell-hole Wal-Mart in Mississippi and was required, as department manager, to visit K-Mart and other surrounding stores to compare prices. We were encouraged to be clandestine about it and not wear our smocks or name tags.

We took pen and paper and made notes, but we didn't bring along a bar code scanner. In fact, I don't understand how a bar code scanner from Wal-Mart would work at another score unless that stores codes and information was in Wal-Mart's computer files. Weird.

It seems to me that is the real question of theft involved.

Not that they were price-shopping.

[Mairead]

16. "I don't understand how a bar code scanner from Wal-Mart would work"

The bar codes aren't unique to the store, they're assigned by the manufacturer on a per-product basis and would be the same no matter who the retailer is. So any scanner will work...but there's no way to get prices doing that, just product line.

[Gays_R_Family]

18. right ...

of course, i'd forgotten. Thanks.

[wakeme2008]

29. Yes but once you scanned Diet Coke... You then manually enter the price

Makes it easy for Walmart to match up exact items....

[napi21]

9. Price comparison is a common practice in every retailer, BUT

I'm not sure if they are permitted to use electronic devices to do so. My husband has worked in supermarkets almost his whole life, and they all shopped the competition. Most often, it was the manager's job to do so, and of course they copied some new ideas if they found any. I suspect there's very little that WM can learn from a bar code, but was simply expediting the info gathering process electronically and eliminating human error. After all, WM could have just purchased the products and scanned the bar code back at the office.

It was, however, a stupid thing to send a person to the competition wearing a WM smock and ID badge. They've been spending millions to try to repair their image, and this is just another negative in the eyes of the public!

[LiberalFighter]

31. I'm all for them spending their $ to do that

[E-Z-B]

10. I thought the barcodes only contain the UPC information.

Then the Super H computer systems would match that UPC to the CURRENT price in their database once it's scanned. If anything, Wal-Mart was only doing an inventory check at Super H, not a price check. Strange...

[losdiablosgato]

12. You are right but you may be wrong

You can after you scan it punch manually in the price into many of the barcode readers. Thus you get the product and the price.

[expatriot]

22. That is what they were doing.... scanning in the product and then

punching in the price. So instead of writing down "15.5 ox box of Kelloggs Frosted Flakes ---- $3.50" in a pocket book.... the WM employees scan the barcode and type in 350. done. It is just a very efficient way to comparison shop. perhaps there is no substance to the charges BUT it is once again bad press for Wal-Mart, it illustrates exactly how "deadly" they are... how efficient they have become to killing off the competition.

[EmperorHasNoClothes]

11. As far as I know

The barcodes don't contain the price anyway - just an ID number that is used to look up the price in the store's database. I can't imagine what benefit using a barcode scanner would have.

[TahitiNut]

20. Shelf label has UPC and price. Scan UPC & key in price. Quick. Easy.

:shrug:

[zalinda]

14. You use the scanner so you can cut

all the prices by a penny or two. When you go in a store you can get only as many prices as you can write down. That is fair. But, to go in with a scanner may be considered corporate espionage, because in a day you can get EVERY price that the market has without spending at the store.

And, it may have been more than just getting prices. They may have wanted to duplicate the products they carried.

zalinda

[jmowreader]

28. The second point is very accurate

We don't consider our prices to be proprietary--we put them on labels, give them out over the phone, even advertise them.

What we consider proprietary is our product selection. With a UPC scanner I could figure it out in a hurry.

[BiggJawn]

15. So they bring the scanner back to Flying Monkey Headquarters...

And start feeding its info into their system...
"Hey, chief! Super H is selling this stuff for the same price WE are, and they have the same inventory!"

Unless they pulled an R2D2 though one of those price check-it-yourself terminals and got ahold of Super H's database....

[fob]

17. Isn't that at least on the face of it price-fixing? Wouldn't that fall

under RICOH?

The issue is there any evidence of WM mimicking SH pricing since SH confiscated this attempt at price grabbing and WM would not have had a chance to use that data.

I worked for a MFG before and we did our best to find out competitors pricing (usually through common customers)but we were SPECIFICALLY told NOT to even discuss pricing directly with our counterparts as that could be considered collusion and price fixing. It seems with WM sending people in with obvious intentions a case could be made.

Old Leftie Lawyer, you here? Little help on this maybe?

[Mairead]

23. A price-fixing charge requires collusion

If I recall correctly, the merchants must have between/among them a significant chunk of at least a regional market, and they must be in bed together on the price--i.e., the price-setting must be constructively the result of cooperation between them, not an attempt by one of the parties to 'meet or beat'.

[HerbieHeadhunter]

19. Having worked at the Wal-Mart home office myself....

about 6 years ago (thank god I moved on) I can say that every Wal-Mart store in the US and Canada sends employees to the competition to do price checks. Whether the employees took their telzon bar code scanners with them or not, I'm not sure.....but it was definitely a standard practice to price check and compare.

That being said...I'm not sure whether I see a particular legal issue with scanning a UPC code at another store.

[alfredo]

21. It's called industrial espionage. It's been going on forever.

[Egalitariat]

25. I doubt the info was proprietary if it was right there on the shelves****

nm

[noonwitch]

26. When I worked for K-Mart, we always sent people to competitor's stores

to compare prices, but no one scanned anything. My manager used to ask who wanted to go with her to Meijer and Zayre (are there still Zayre's?) to comparison price, and then she would adjust accordingly.

[jmowreader]

27. What this really does for them

Walking the competition with a UPC scanner does quite a few things for you.

It ensures accuracy. You don't have to worry about putting the price for 32-ounce jars of pickles on the line for 64-ounce jars.

It helps in foiling rampant price matching. If someone comes into Wal-Mart and says they've found those big bottles of Tabasco for 50 cents cheaper at Super H, the manager can hit a few keys to determine that while they may be big bottles, they're not the big bottles WE carry. (I remember Tansy Gold once telling us that when she worked there, Wal-Mart would have special things made up just for them specifically to stop price-matching attempts.)

It's quicker.

You can shoot the information right into the UPC server.

Okay, it's dirty pool--especially walking the floor of Super H in your Wal-Mart uniform. But they don't spend all that money on scanners for no reason.

[Spinzonner]

30. Does the Geneva Convention apply to the in-uniform scanners

when they are caught ?

[Maine-ah]

32. I used to work for Wal Mart (years ago)

and yes, they would send us out to do "comp shopping". They still practice this. My husband's step mother has been kicked out of the local Home Depot for doing this.

[demgurl]

33. I have to agree, it is done all the time.

I am an independent contractor and was hired by a firm to do this a couple of weeks ago. I was doing fast food restaurants. They said if we were approached by the manager we should just say we are doing a 'quick' pricing survey of area fast food restaurants. I was assigned a bunch of Mcdonalds and Wendy's restaurants and I am pretty sure I know what chain I was doing it for.

One Wendy's manager would have none of it. She said I had to leave and I was NOT allowed to return! I was honestly afraid if I went back she would call the cops. My supervisor got someone else to do it for the company. She said about 1 in 20 managers react this way. Go figure. But it is money and we really sort of need it right now.