The suit, filed in U.S. District Court in Minnesota, cited a study that claimed 74% of Kmart's advertised price comparisons were wrong. The ad displays listed either incorrect prices for Kmart products or Target prices, or included a comparison to a product Target does not sell.
'Program is accurate'
A Kmart spokesman said the "Dare to Compare" program is accurate, and that the retailer will defend its accuracy.
Jack Ferry, director of financial and corporate communications for Kmart, said the company is "still committed to the Dare to Compare" pricing campaign. "We will vigorously defend the program and the lawsuit."
A Target spokeswoman said Kmart's agressive pricing initiative is not of concern to the chain, but the accuracy of the claims is. "It's not about getting the prices right, it's about getting the prices accurate," she said.
Kmart sparked a price war among the nation's large discount chains earlier this year when it launched its Blue Light rebranding initiative along with an pledge to carry strong values on products consumers use every day.
Kmart in a statement said its program helps customers make "informed purchase decisions" and has resulted in an increase in the number of customers in stores, transactions and Kmart's perception as a low-price leader.
Kmart went on to say that it was "unfortunate when a competitor has to resort to needless, costly litigation when they discover that they are falling behind in pricing in the retail arena."
Omnicom Group's TBWA/Chiat/Day, New York, is Kmart's agency. Kmart's in-store advertising is done by FRCH Design, Cincinnati. Target uses a number of shops nationwide, including Peterson Milla Hooks, Minneapolis.