Safeway Sued for Selling Cheaper Gasoline

Categories: Business
safewaybio2.jpg
Okay, so it's not THAT cheap
Cheap fuel -- now that's not a typical topic of conversation these days.

While Bay Area drivers bask in the reality that they can fill up their tank at a local Safeway store on the cheap(er), six East Bay gas stations are suing the grocery retailer for lowering their fuel prices and crippling surrounding business.

According to the lawsuit filed in Alameda County Superior Court, Safeway offers a 3-cent discount on every gallon of gas for its club card holders. But it's easy to get that discount, even if you can't be bothered to sign up for a card -- just give the Safeway attendant a phone number.

But there's more.
The gas stations claim that anyone who has shopped at Safeway can go inside the store, show food receipts, and get an additional discount on gas -- as much as 10 cents per gallon, according to the claim.

In other words, Safeway is siphoning off local drivers who might otherwise fill up elsewhere. The plaintiffs allege that Safeway's "unlawful or unfair" pricing schemes is having an international effect.

"Surveys consistently show that the Safeway station, with its available discounts, offers the lowest retail-sales fuel price in the local market. ... The Safeway retail prices are below its cost in violation of California law."

So now fuel stations are demanding that Safeway take what it has earned from that extra business and pay them -- no less than $100,000 in damages.

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11 comments
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Sk8blunted
Sk8blunted

Disgusting! Another example of collusive monopolistic activity, using private entities using the government to keep up prices, forcing the consumer to pay more for less!

Macduncan106
Macduncan106

So, hmmm...  Why didn't Home Depot raise prices when all the little hardware stores went out of business?  Why hasn't Walmart raised prices when the little drugstores went out of business? Why didn't Guitar Center raise prices when the hometown music stores disappeared. 

This isn't the 1890's.  Capitalism is good and I like big box stores.  Little stores that fill a unique niche are still around.  The little stores that only survived by overcharging us when they had their little, local monopoly are gone. 

All the overpriced, independant gas stations in my area all seem to charge exactly the same price and change prices simultaneously when the price does change.  Fix prices much?  Maybe that's where the lawsuit should be.  They're going after Safeway because Safeway is messing up their sweet deal.

Sunnishayla
Sunnishayla

Just have to say, I couldn't agree more with your comment. You said exactly what I was thinking.

Cieloesprit
Cieloesprit

Celebrate!! The greedy are telling on themselves.  Boycott the greedy, buck the petulent entitled, and vote with your wheels!!  John Higgins

PowerTen
PowerTen

If you don't like the price of gas, walk or bike.................actually gas is still cheap

Jim
Jim

This is actually a legitimate lawsuit. Predatory pricing is the practice of selling something at below cost in order to drive competition out of the market, and then raising the cost after the smaller companies get put out of business. There is a reason it's illegal, and the law needs to be enforced. Safeway's club card and food receipts are irrelevant, but they cannot sell gas below cost.

Guest
Guest

They are being accused of predatory pricing. Once their competitors are out of business, they raise prices quite quickly, ultimately screwing consumers. That is why it is illegal. This is such a badly written article, I can understand why Brooks and A@B didn't understand.

Glawton12
Glawton12

Or their competitors could just lower their gas prices too. One would assume the cost of entry, and to maintain a gas station thereafter, is pretty universal, so at some point they'd all have to stop at around the same lower price. Wait, isn't that how capitalism is supposed to work? Odd.

Inrdblossom
Inrdblossom

Indeed. It's an attempt to buy a monopoly by exploiting the cost of entry (setting up a new gas station) as a means to keep competitors out once they've been shut down by the initial maneuver.

I wouldn't be surprised if there were another side to the story, though.

A @ B
A @ B

i'm with Brooks.. you don't like it, lower your prices too!

Brooks Hassig
Brooks Hassig

Sounds like they need to be suing Capitalism instead...

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