Red Shed raises advertising stakes

The Warehouse has taken the gloves off with the launch of an advertising campaign that explicitly compares its prices to those of its competitors.

A brochure mailed to 1.2 million homes across the country today will set the prices of goods sold in the Red Sheds against those of five competitors - Farmers, Bunnings Warehouse, Sounds, Whitcoulls and SuperCheap Auto.

Advertising experts labelled it a bold move that could spark retaliation.

"It's something that has not traditionally been used in New Zealand," said Jon Ramage, chief executive of advertising agency Young & Rubicam. "I would expect competitors would respond quite aggressively."

Warehouse chief executive Ian Morrice said his company was built on bargains. "Our comparative advertising simply highlights what savvy shoppers already know."

Comparative advertising has been rare in New Zealand, with previous instances sparking legal battles. In 2003 Australian hardware chain Bunnings Warehouse had a High Court injunction preventing Bunnings from using Mitre 10 brochures within its stores overturned in the Court of Appeal.

The Warehouse goes even further, printing competitors' trademarks in its brochure - a move made possible by changes to the law governing trademarks in 2002.

Bunnings general manager Brad Cranston said he was not concerned that his company was being used for price comparison.

"We're quite happy to have some free advertising," he said.