No More Cheap Gas at Safeway?
|Any savings you had was probably spent sitting in line waiting for the next free pump at Safeway|
An Alameda County judge has "hinted" that he will block Safeway stores from offering cheaper gasoline to their Club Card members and loyal shoppers across the Bay Area. And you can thank the surrounding fuel stations for that.
A group of local filling stations filed a lawsuit against Safeway, claiming the big chain grocer was offering cheaper fuel and putting other stations are making it harder to lure broke-ass drivers to their pumps.
The lawsuit was first filed in 2008 by Dixon Gas Club, which claimed Safeway was violating the California Unfair Practices Act by offering promotional discounts through its grocery rewards card and Club Card programs. The Club Card promotion gives Safeway customers a .03 percent discount on fuel and the Grocery Rewards Program gives shoppers a discount on gasoline depending on how much they spent on groceries.
That sounds fair ... if you are a Safeway shopper. However, Alameda Superior Court Judge Wynne Carvill said an internal document describing Safeway's pricing strategy proves that that the store's policies are harming local gas stations.
"It is clear that those who developed defendant's discount programs believed the 3¢/gal. discount on the Club Card would generate additional volume and do so by diverting sales from, among others, its single product competitors -- including those like plaintiff who compete on price and are often smaller market participants," Carvill wrote.
Jim Dombroski, the attorney representing the gas stations, says he is looking forward to Carvill ordering a preliminary injunction later this month. "Unfortunately, the perception is that the public generally just wants the cheapest gas available, they don't care if it's sold below cost or not," he told Courthouse News.
And although he is correct about that, Dombroski makes another good point: If Safeway can run all other gas stations out of town, then it can ultimately control the price of fuel, and that's never a good thing.
"That's where the consumer gets hurt," he said.
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