Dive Brief:
- Albertsons will pay $3.9 million to settle a civil law enforcement complaint alleging that the company unlawfully upcharged customers at its stores, Los Angeles District Attorney George Gascón announced Thursday.
- The complaint accuses the grocery company of inaccurate weights on products such as produce, meats and baked goods, ultimately charging more for less product.
- The settlement comes as Albertsons and Kroger await a judge’s decision on their merger plan, where the opposition continued to argue the deal would negatively impact competition.
Dive Insight:
The settlement casts another shadow as the grocery industry grapples with concerns about competition — a marquee topic during the court battles over the proposed Kroger-Albertsons merger.
Superior Court Judge Sheila Lichtblau ruled Albertsons and Vons are required to pay around $3.2 million in civil penalties and $749,500 in costs and restitution to cover investigation costs and support future enforcement of consumer protection laws, according to the Los Angeles district attorney’s announcement. The judgment also prohibits Albertsons and its banners from engaging in false or misleading advertising.
Albertsons is required to implement a “Price Accuracy Program,” which includes a Price Accuracy Guarantee that compensates customers up to $5 if they are overcharged: “The program is an incentive to encourage consumers to report false advertising to the store as soon as it is discovered,” the announcement noted.
“False advertising preys on consumers, who are already facing rising costs, and unfairly disadvantages companies that play by the rules,” Gascón said in a statement. “This kind of corporate conduct is especially egregious when it comes to essential groceries, as Californians rely on accurate advertised prices to budget food for their families.”
Albertsons has since made efforts to show its commitment to price accuracy, including posting more visible signage at the front end of stores, conducting additional associate training and using price tracking systems, a spokesperson said in an emailed statement.
“We are committed to ensuring our customers pay the lowest advertised price on a product, and we work quickly to correct any price discrepancies. Any customers who may have been inadvertently charged a higher price are eligible to receive a gift card or the item for free as outlined under Albertsons, Vons, Pavilions price accuracy guarantee policy which can be found posted in stores,” the spokesperson said.
Los Angeles District Attorney’s Consumer Protection Division investigated and prosecuted the case against Albertsons in partnership with consumer protection units from the district attorneys’ offices of six other California counties. The case was filed in Marin Country Superior Court, according to the press release.
Value messaging continues to be a major theme in grocery as consumers’ worries about rising food prices remain persistent.
Kroger recently announced a weeklong set of promotions as part of its first-ever “Customer Appreciation Week” that ran through Oct. 1 and offered discounts on a broad range of private label and name-brand products. This initiative builds on Kroger’s messaging around its intentions to lower prices if it is allowed to combine with Albertsons.
Editor's Note: This story has been updated with comments from Albertsons.
