August 27, 2001
Target Corp. says it's preparing to sue Kmart, charging that Kmart's "Dare to Compare" advertising campaign misquotes Target prices 74 percent of the time.
The Target suit in U.S. District Court in Minnesota accuses Kmart of violating the Lanham Act, a federal statute governing truth in advertising, as well as Minnesota's consumer protection laws.
Kmart launched its "Dare to Compare" campaign as discount retailers fight for market share in a sluggish economy. Kmart claims it has lowered prices on about 20,000 products so far.
The Kmart campaign uses in-store signs to promite its prices on specific products, comparing them to Target and other retailers. The Target suit charges that an "astounding" number of the signs are wrong.
Target hired a Chicago research firm, Leo J. Shapiro and Associates, to conduct a price comparison audit. The audit covered 98 Kmart stores in Atlanta, Detroit, Los Angeles, Miami and Minneapolis-St. Paul.
The low-price competition is getting to be too much for some retailers. Sears announced last week it's throwing in the towel and abandoning its lowest price guarantee. Instead it's launching a new ad campaign that will portray Sears as "a fun place to shop."
Sears has lost $21 million so far this year. Target reported earnings of $271 million for the most recent quarter.