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Tuesday, August 24, 1993 - Page updated at 12:00 AM

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Corrected version

Wal-Mart Suit Could Open Floodgate -- Predatory-Pricing Trial Opens

AP

CONWAY, Ark. - Wal-Mart Stores Inc. could find itself open to lawsuits from angry merchants nationwide if three Arkansas pharmacy owners prevail in their $1.1 million predatory pricing case against the giant retailer.

Opening arguments in the non-jury trial began yesterday in Faulkner County Chancery Court.

The three independent store proprietors say Bentonville, Ark.-based Wal-Mart is violating Arkansas' Unfair Practices Act, which bans selling or advertising goods below cost "for the purpose of injuring competitors and destroying competition."

Wal-Mart's pricing policies "have had a negative effect on our store. . . . I lost customers," said plaintiff Dwayne Goode, owner of American Drugs Inc. of Conway, Ark.

The company has admitted in court filings that it does sell some products below cost.

But David Glass, the company's president and chief executive officer, said Wal-Mart isn't seeking to drive anyone out of business. He said individual stores can lower prices on some items, based on local competition.

"It would be better if you could make a profit on everything you sell, but in the real world, that isn't possible," Glass testified. "That's the principal reason why we do it."

If the three drugstore owners win their suit, Wal-Mart could be open to similar charges from other small competitors.

The Arkansas suit is not the first time Wal-Mart has been taken to court over its pricing policies. The retailer lost a similar case in 1986 in Oklahoma and was forced to raise its prices in that state.

Wal-Mart, which opened its first store in Washington state in May, became No. 1 by offering the lowest prices possible, but along the way it has been blamed for the demise of some long-established merchants in small cities around the country.

Published Correction Date: 08/26/93 - Wal-Mart Settled A Pricing-Policy Case In Oklahoma In 1986. This Story Incorrectly Described The Outcome Of That Case.

Copyright (c) 1993 Seattle Times Company, All Rights Reserved.

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