February 23rd, 2017
The Competition Bureau wants to make sure that mattress buyers get a good night’s sleep knowing that they actually saved money instead of receiving a fake discount. In its latest application filed with the Competition Tribunal, the Bureau alleges that Hudson’s Bay Company misleads consumers through a “high-low” pricing strategy, whereby it grossly inflates the regular prices of its mattress sets, only to advertise deep discounts off these regular prices.
The Bureau’s application invokes the Competition Act’s “ordinary selling price” provisions, which require retailers who advertise a discount from a regular price to have sold a substantial volume of the article at the regular (or higher) price, and to have offered it for sale at the regular price for a substantial period of time.
The Bureau says that that HBC’s regular prices for mattress sets were so far beyond what the market would bear that sales at the regular price were virtually non-existent. The Bureau cited numerous examples of HBC’s weekly flyers promoting various mattress set brands between 2013 and 2014, and compared the actual volume of sale for each type of mattress set at both regular and promotional prices to support its claim that the discounts offered by HBC were not actual savings.
The Bureau also claims that HBC misled consumers by promoting its mattress sets as part of inventory “clearance” or “end of line”, giving the false impression that the price has been permanently lowered to sell any remaining on-hand inventory, when in fact HBC was ordering new factory fresh mattress sets to fulfill new purchase orders.
The Bureau is seeking an administrative monetary penalty, among other remedies. HBC has not filed a response at this time.