First Germany. Then Wisconsin. Now Oklahoma. Wal-Mart is battling predatory pricing charges in a growing number of juridictions. This latest case involves scanners, David Glass, and a vendetta. On September 26th, Crest Foods of Edmond, Oklahoma, filed a lawsuit in the U.S. District Court, Western District of Oklahoma, charging the world’s biggest retailer with violating the Sherman Act, the Oklahoma Unfair Sales Act, and the Oklahoma Antitrust Reform Act. The charges were brought by Crest supermarket, a discount grocery store in Edmond. They charge that Wal-Mart opened up a supercenter in Edmond in May of 2000, about two miles from the Crest store. On the same day the Wal-Mart opened, Walmartians paid a visit to Crest, entering the store with hand-held scanners, and began recording the prices at Crest. All this was filmed on security cameras by Crest. Wal-Mart also entered the store on several other occasions, the suit claims, and attempted to recruit workers to leave Crest and join Wal-Mart. On May 23,2000, only 6 days after Wal-Mart opened in Edmond, 5 Wal-Martians entered the Crest store. The assistant manager, believing they were scanning prices, asked them to leave. A senior manager then told the Wal-Mart employees they were free to stay and look around the store, but they did not want them scanning prices. The Wal-Mart group, “unbeknownst” to Crest, included David Glass, the immediate past president and CEO of Wal-Mart, the big squiggly himself! The Crest complaint says the grocery store was told later that Mr.Glass was offended that he was “kicked out” of Crest, “and that Mr. Glass ordered the Edmond (Wal-Mart) supercenter to obtain revenge by dropping its prices even below cost if necessary to drive Crest out of business.” Crest claims that Wal-Mart then proceeded to implement this “mandate” by lowering prices on “sensitive items” that bring shoppers in the store, like bread, milk and orange juice. The Edmond Wal-Mart, Crest says, priced these items ‘significantly below even the prices of other Wal-Mart supercenters in the Oklahoma City area…” Crest says it can prove that Wal-Mart prices these items below cost, which is illegal, and destroyed Crest’s ability to compete fairly with Wal-Mart. The action is brought under the Oklahoma Unfair Sales Act, in which Wal-Mart sold items at less than cost with the intent and purpose of inducing the purchase of other merchandise or unfairly diverting trade from a competitor or otherwise injuring a competitor, impairing and preventing fair competiton, or injuring public welfare, which is unfair competition and contrary to public policy…” The complaint says Wal-Mart’s actions have “substantially lessened competition, or has unreasonably restrained trade, or has tended to create a monopoly.” Crest notes that Wal-Mart “had the specific intent to drive Crest out of business according to the mandate of Mr. Glass.” The grocery store also complains that Wal-Mart violated the Oklahoma Antitrust Reform Act by engaging in unfair competition and unreasonably restraining trade.The third count says that Wal-Mart attempted to achieve a monopoly in the market, and that Crest has lost sales and good will and diminution in its going-concern value.
The assistant manager did not recognize Mr.Squiggly when he entered the store. Being kicked out of a competitor’s store is nothing new for Wal-Mart CEOs. Sam Walton in his autobigraphy, told the story of being kicked out of a Price Club in San Diego. “I had my little tape recorder with me, like I always do,” Walton wrote, “and I was making notes to myself about prices and merchandising ideas. This guy, a big guy, comes up to me and says ‘I’m sorry but I’ll have to take your tape recorder and erase the material you’ve got on it. We have a policy against people using them in the stores’. Well, we (Wal-Mart) have that same policy, and I knew I was caught.” Walton got his tape recorder back with nothing deleted. “He probably treated me better than I deserved.” Grocers have often told me that Wal-Mart frequently scans their stores for prices. As in Sam Walton’s case, Glass probably was treated better than he deserved by Crest, since Wal-Mart kicks out people with tape recorders and cameras. I was once detained by Wal-Mart staff in their parking lot, and they called the police to remove me. My crime? I was being filmed by a TV crew! It seems like Wal-Mart is overly sensitive when other people treat them as they treat others. For further information on this lawsuit, contact [email protected]