HBC denies deceptive pricing accusations from competition watchdog
A women leaves the downtown Toronto flagship Hudson Bay Company store in Toronto on Monday, Jan. 27, 2014. (Nathan Denette / THE CANADIAN PRESS)
Aleksandra Sagan, The Canadian Press
Published Wednesday, February 22, 2017 12:10PM EST
Last Updated Wednesday, February 22, 2017 2:44PM EST
TORONTO -- Canada's competition watchdog says it is suing Hudson's Bay Co. over alleged deceptive pricing practices -- an accusation the retailer denies.
The Competition Bureau claims HBC (TSX:HBC) misled customers over the prices of mattresses and box springs sold together since at least March 2013 until now, according to a notice of application filed to the Competition Tribunal.
HBC allegedly offered sleep sets at "grossly inflated regular prices" and then advertised deep discounts on them to promote sales, according to the document.
"The regular prices of the sleep sets were so inflated above what the market would bear that sales at the regular price were virtually non-existent," reads the filing.
HBC listed a Mount Royal tight top queen sleep set at $1,998 and then a sale price of $788 in 2014, for example, but never sold one at the regular price, the agency claims.
The retailer disagrees with the bureau's position and will vigorously oppose their application to the Competition Tribunal, company spokeswoman Tiffany Bourre said in a statement.
"We believe our mattress pricing process is fair, competitive and in line with industry standards and the Competition Act," she said.
HBC has not yet filed a response to the bureau's notice of application and Bourre did not immediately respond to a question on whether the company planned to do so.
The agency also alleges HBC misled consumers by suggesting it was selling its remaining inventory during clearance and end-of-line promotions, which imply the low price is permanent until all remaining inventory is sold. However, HBC allegedly replenished its inventory during such sales by ordering new sleep sets from manufacturers.
The legal action against the retailer is about providing customers with accurate and truthful information when they're deciding what to purchase, Commissioner of Competition John Pecman said in a statement.
"Savings claims must always reflect real discounts," he said.
The bureau said it wants HBC to stop these practices and pay an administrative monetary penalty of an unspecified amount. It is also seeking for HBC to pay the costs associated with the proceeding and any further relief the commissioner may ask for and the tribunal has the discretion to permit.