3 Drugstores’ Higher Profits Cited in Wal-Mart Suit : Retailing: A CPA testifies for the defense that the plaintiffs’ businesses have thrived despite their rival’s low prices.
CONWAY, Ark. — Although three drugstores accuse Wal-Mart of trying to ruin them with predatory pricing, the merchants have had higher sales and profits since the nation’s largest retailer opened its own pharmacy here, an accountant testified Tuesday.
Stephen Humphries, a certified public accountant, testified for the defense in the second day of trial in the $1.1-million lawsuit the independent pharmacies brought against Wal-Mart Stores Inc.
Humphries, who works for Frost & Co., the largest Arkansas-based CPA firm, said he studied the three plaintiffs’ tax returns and financial statements since 1988. He said the companies were growing, thriving operations that showed steady growth in sales and profits throughout the period.
The suit was filed in 1991 by Dwayne Goode, owner of American Drugs Inc. of Conway; Jim Hendrickson, owner of Baker Drug Store of Conway, and Tim Benton of Mayflower Family Pharmacy. The three accuse Wal-Mart of violating the state Unfair Practices Act, which prohibits selling items at a loss with the intention of harming competitors.
Judge David Reynolds is hearing the non-jury trial in Faulkner County Chancery Court. Attorneys gave closing arguments Tuesday. Reynolds gave each side 10 days to submit additional briefs and 10 more days to respond to each other. The judge said he will probably rule within a month after that.
A loss by Wal-Mart in the case could encourage other retailers to bring suit against the company.
The three pharmacies allege that since Wal-Mart opened a pharmacy in its Conway store in 1987, it has attempted to put them out of business by selling items for less than they cost the giant retailer.
Wal-Mart attorney William Sutton said in his closing arguments that Wal-Mart is not trying to drive competitors out of business.
“Wal-Mart is busy making a profit,†he said.
Goode testified Monday that Wal-Mart’s prices are so low he buys toothpaste, mouthwash, aspirin and some other items at Wal-Mart to stock his own store.
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