Cloverleaf’s advertising hits nerve with Wal-Mart

When Wal-Mart Canada Corp. opened its doors in Fort Frances in 2004, owners of some small stores, like Cloverleaf Grocery in Emo, had to change their marketing tactics to maintain business. Dan and Mark Loney crossed the U.S. border to purchase some bargain merchandise at Sam’s Club—the warehouse chain owned by Wal-Mart Stores Inc. And they posted signs on their shelves to promote their prices were lower than the larger corporation’s. But Wal-Mart was not impressed by their resourcefulness. The brothers received a letter last week from the corporation’s lawyer, demanding they stop using Wal-Mart’s trademarks in their advertising or they would take legal action. The four-page letter from John Macera of Macera & Jarzyna LLP in Ottawa, dated April 23, asserts Cloverleaf in violating advertising, packaging, labelling, trademark, and other regulations. It states words such as “We Checked it Out,” “Wal-Mart’s Best Price,” “Wal-Mart’s Best Deal,” and “Wal-Mart’s Roll Back Price” were discovered posted in Cloverleaf Grocery and use the trademark name. Mark Loney acknowledged they have been comparing their prices to Wal-Mart’s for the last three years. “It started when we visited the newly-opened Wal-Mart store in Fort Frances and witnessed one of our customers purchasing [canned] salmon . . . we had the same product in our flyer for considerably less,” he explained, adding on the way out of the parking lot he read the sign “Low Prices Always.” “I was thinking at the time that a more accurate slogan should be ‘Low Prices Sometimes,’” he continued. “If they can ‘check’ everyone else out, why can’t we ‘check them out?’” So the brothers came up with their own signs—ones they believed were more accurate. When they “check out” a price, they include the name of the store, the date the price was in effect, and post the receipt to prove it. But in their accuracy, they have used Wal-Mart’s trademarks. “The printed in-store signs that include one or more of Wal-Mart’s registered trademarks are being used for the purpose of appealing to Wal-Mart’s customers in an effort to weaken their habit of shopping at Wal-Mart,” the letter claims. “Moreover, because of the very extensive use and advertising of Wal-Mart’s trademark’s, Wal-Mart has a very strong cause of action against you for unfair competition and passing off,” it adds. In addition, Wal-Mart alleges the Cloverleaf signs are false and misleading, citing: •sometimes the signs refer to a Wal-Mart price that is months old instead of the current price; •sometimes the price is compared to that of a Wal-Mart store in Winnipeg; and •sometimes the comparing products appear to be American products to Wal-Mart’s Canadian products. “Sometimes our price checks are done in Winnipeg . . . because Wal-Mart will not let competitors ‘check out their prices,’” Loney explained. “If we are caught doing a price check in Wal-Mart in Fort Frances, we are promptly escorted out.” He added it’s difficult to compare prices with Wal-Mart’s because they sell different-sized products than they do, so on the Cloverleaf signs they indicate both the size and price of the products. “I don’t have access to some of those sizes,” Loney explained, noting some are made especially for Wal-Mart. “Maybe they do it on purpose.” In addition, the letter from Wal-Mart’s lawyer states the products violate regulations by not having bilingual wording on them and do not appear to have been inspected in Canada. Loney stressed they do affix bilingual labels to any products that don’t already have them. And as far as he knows, they are not doing anything wrong in bringing U.S. products into Canada. But he knows Wal-Mart has the lawyers, resources, and knows obscure regulations, which they do not. “We hope to keep our principles and integrity through this battle at all costs,” Loney stressed. “If we are using words that Wal-Mart ‘owns’ or are somehow competing unfairly to Wal-Mart, we will change to comply. “But we will not let Wal-Mart bully us into submission. “We’re just trying to stay competitive and service the district,” he continued. “So we’ll take it as it comes.” The brothers have sought legal advice and will make any changes necessary to comply with regulations. Loney said he does feel Wal-Mart’s pricing is overall fair, and that a large part of their success comes from their fair pricing. “They don’t, however, ‘always’ have the best price,” he stressed.