New Delhi: Accusing a bigger rival of trademark violations and unfair business practices, Indian retailers Shoppers Stop Ltd and Dubai-based The Landmark Group’s Lifestyle have dragged Pantaloon Retail India Ltd to court over its discount offer to the duo’s customers who are members of shopping loyalty programmes.
The move follows advertisements last month by Pantaloon’s unit Central that offered 30% discounts to customers at its Gurgaon mall over a weekend.
The advertisement said the loyalty card holders of other retailers including Shopper’s Stop, Lifestyle and the Tata group-owned Westside will get an additional 10% discount. “Present your membership card to avail this offer” on select apparel brands, said the ad that appeared on 28 June in The Times of India, published by Bennett, Coleman and Co. Ltd, which competes with Hindustan Times published by HT Media Ltd, also the publisher of Mint.
Loyalty cardholders are a mainstay of business for Shoppers Stop as its “First Citizen” cardholders accounted for almost 70% of the retailer’s sales in May, according to brokerage firm CLSA Asia Pacific Markets. Pantaloon itself banks heavily on its loyalty card members as they contribute about 55% lifestyle format sales, CLSA said.
Shopper Stop has more than a million cardholders, according to court filings reviewed by Mint.
“They (Pantaloon) are luring my customers by using my name in an unfair manner,” said Sandeep Mittal, the lawyer representing for both the petitioners.
Last week, the Delhi high court issued an injunction to Pantaloon from using rivals’ names in its spot ads, Mittal said. The court will next hear the matter on 31 July.
Pantaloon says it is prepared to fight the case. “It was a pure marketing initiative. Why so much fuss about it?” asks Rajesh Seth, vice-president of marketing for Central. “Customers own multiple loyalty cards but they still have the right to choose wherever they want to shop.”
Seth said Central would not use the advertisement until the injunction is cleared. “We will have our point of view that our legal department will take it forward,” he said.
Westside also sees the Central ad as “concerns” for the Tata unit, said its head of marketing, Smeeta Neogi. “We have sent a notice to them to which they have not responded,” she said. “For further action, we are talking to our legal experts.”
One trademark expert said the case posed interesting challenges to the rules in the area. Attorney Neil Mason said, “It’s an interesting case for the judges to decide.”
If the use by Pantaloon is not interpreted as a trademark use, there could be a valid defence, he said.
The scrap between the firms is not new. Last year, Pantaloon had invited ire from rival retailers for taking potshots at them in ads for its Big Bazaar stores.
Pantaloon put up billboards in New Delhi and Mumbai asking customers to “Keep West-aSide,” “Shoppers! Stop” and “Change Your Lifestyle. Make a Smart Choice.