Best Buy Complains About Walmart's iPhone 5 Holiday Sale, Claims $65,000 Profit Loss in One Day
The Wall Street Journal notes that several retailers including Best Buy and Toys "R" Us have complained to attorneys general in a handful of states about advertising practices of Walmart. Generally, the complaints stem from comparison ads by Walmart in which competitors assert that Walmart is using inaccurate pricing or non-equivalent items to claim that it offers the lowest pricing.
But Best Buy also alleges that Walmart was deceptive with its iPhone 5 holiday sale in which it dropped pricing to $127, although the article quotes $150 pricing.
Best Buy said it lost about $65,000 in profit the day Wal-Mart's promotion first ran on Facebook, because it was compelled to match Wal-Mart's advertised $150 price, even though it concluded that Wal-Mart didn't actually have a sufficient number of iPhones available.
Walmart claims that it did have sufficient stock of the iPhone 5, quoting 98% availability at its stores carrying the device. Walmart had noted as the sale launched that it was working closely with Apple on the promotion and was securing significant numbers of iPhones, but that the sale was first-come, first-served with no rain checks offered at stores where the device was out of stock.
Best Buy had already been selling the iPhone 5 for $149.99 when Walmart announced its own sale, but it is unclear if Best Buy used the $73 difference from regular price or $23 difference from Best Buy's sale price in calculating its profit loss. Assuming the latter, Best Buy would have price matched on approximately 2800 iPhone 5 sales in one day.