Competition Bureau investigates HBC, Sears for deceptive mattress marketing

Canada's consumer watchdog is looking into Sears Canada and Hudson's Bay Company for mattress pricing strategies that made it look as if some products were being sold at a discount, when they were really going for regular price.

The Competition Bureau confirmed to CBC News on Monday that it was looking into the two chains to determine if marketing practices in their mattress departments were deceptive.

That confirmation came after the Globe and Mail on Monday first reported that the consumer regulator “failed to offer certain sleep sets at the regular price or higher for a substantial period of time," quoting a court filing. 

The two chains also "made materially false or misleading representations to the public in relation to ... clearance sales," the Globe and Mail alleges in quoting a bureau filing.

Essentially, the watchdog is investigating whether the two stores advertised certain mattresses and mattress sets as being on sale at certain times, when in reality they were never offered at a regular, higher price for any amount of time, implying there's no genuine discount to be had.

The bureau told CBC News on Monday it is looking into the chains' "pricing representations to the public regarding certain mattresses."

The bureau is in the process of requesting information from the two retailers on pricing strategies dating back almost two years.

But the bureau was quick to note that it's in the early stage of its investigation, which may indeed conclude that nothing untoward happened. 

"There is no conclusion of wrongdoing by either Sears or HBC at this time, and no application has been filed with the Competition Tribunal or any court to seek remedies for alleged anti-competitive conduct," the bureau said.

Sears Canada, for its part, says it stands by its advertising standards and looks forward to working with the bureau to clear up the matter.

"We acknowledge that the Competition Bureau has filed an application to obtain an order requiring Sears to produce certain records and information," Sears Canada spokesman Vince Power told CBC News. "The order was issued as part of an inquiry by the bureau into regular price claims by certain Canadian retailers with respect to the promotion and sale of mattress sleep sets.

"We're continuing to co-operate with the bureau in its investigation and are in the process of providing the documents and information requested under the order."

For its part, HBC also said it has done nothing wrong. "The process by which Hudson’s Bay prices its mattresses is in line with industry standards and, in its view,  is in accordance with all Canadian laws and regulations," a spokesman said. 

"We are happy to offer Canadian consumers competitive prices and promotional sales."