Dive Brief:
- Albertsons is facing a lawsuit from Washington state alleging that the grocery company overcharged consumers in over 3 million transactions involving BOGO deals over the course of five years.
- The lawsuit, which was filed Monday in King County Superior Court, claims the grocery operator’s Safeway, Haggen and namesake banner violated a state consumer protection law by artificially increasing the price of BOGO items leading up to the promotion. The lawsuit alleges the banners brought in nearly $19.7 million from “price manipulations.”
- “As a result of this artificial price manipulation, consumers making purchases under these promotions are paying a premium and not truly getting a 1:1 free product as advertised,” according to the complaint.
Dive Insight:
The lawsuit is the latest example of the heightened scrutiny grocers are facing from state and federal regulators as well as consumer advocacy groups regarding their pricing practices.
“We want to make sure we’re protecting people’s pocketbooks, and we all know that affordability is a major issue these days. We’ve got to push back when companies are misleading their customers,” Washington Attorney General Nick Brown said in a statement.
Albertsons said in a statement to Grocery Dive that it engaged in good‑faith discussions with the attorney general’s office and strongly disagreed with the claims, which the company said “are based on flawed analysis and data errors that we identified and raised” with the attorney general’s office.
“Albertsons Companies is committed to complying with the law and to offering customers clear value through our promotions,” the grocer said, noting that it cannot comment further because of the pending litigation.
The lawsuit claims the three Albertsons banners artificially hiked prices on items in the weeks leading up to those products getting categorized for BOGO deals and then lowered the prices within about a month after the deal ended.
“The net result is that consumers think they’re getting a second item free, but in practice, they’re just paying an inflated price for the first item,” Brown’s office said in a press release.
The lawsuit gives examples, including a bottle of olive oil at an Albertsons in Gig Harbor, Washington, that cost $6.99 a week before the BOGO deal, then rose 57% to $10.99 during the promotion. After the promotion, the grocer brought the price back down to $6.99.
“These types of price manipulations continue at all three store banners throughout Washington and throughout the time period at issue,” the complaint stated.
The lawsuit covers 3,190,584 transactions from October 2019 to May 2024. Albertsons runs over 200 stores in Washington state under its Safeway, Haggen and Albertsons banners.
Brown’s office noted that the grocery company paid $107 million to settle a 2016 class action lawsuit related to misleading BOGO deals in Oregon and separately settled a proposed class action case filed in 2023 in federal court related to deceptive BOGO promotions in Washington state.
Along with the scrutiny over Albertsons’ BOGO deals, several state and federal regulators have recently introduced bills aimed at restricting how retailers use consumer data to make pricing decisions.
