LOS ANGELES -- Food 4 Less Supermarkets, La Habra, Calif., is suing Lucky Stores, Dublin, Calif., for $200 million in damages, claiming the retailer has used false and misleading advertising and anti-competitive practices based on Lucky's ongoing price-comparison ad program.
The suit sheds light on southern California's supermarket price battle at a time when many operators here are fighting to lift their same-store sales comparisons out of negative territory.
The suit, filed in Superior Court here, charges that Lucky has consistently advertised false and misleading price comparisons since June 17, 1991, "by . . . knowingly and purposefully misrepresenting . . . that Lucky supermarkets are both the 'low-price leader' and the 'low-price leader every day' . . . while routinely and knowingly excluding lower-price supermarket competitors, such as Food 4 Less, from its price-comparison advertising."
The suit also charges that Lucky is excluding Alpha Beta, another Food 4 Less operation, from its price comparisons, a move it claims violates a California court order.
The $200 million Food 4 Less is seeking includes $100 million in general damages and $100 million in punitive damages.
Lucky, in its print ads, typically runs price comparisons against major full-service competitors in the market, including Vons Cos., Ralphs Grocery Co. and
Albertson's. Judie Decker, a Lucky spokeswoman, said the company had not yet been served with the suit, "but we understand it challenges Lucky's low-price leadership, and we believe we have adequate documentation to sub-
Herbert Hafif, the Claremont, Calif.-based attorney who filed the suit, said Food 4 Less had asked Lucky to change its advertising policies voluntarily. "We're not trying to punish Lucky, but we've given them plenty of time to think about it and they have persisted. This [lawsuit] is the last resort," he said. Food 4 Less is seeking a jury trial. Hafif told SN he expects the case to reach the trial stage no sooner than a year and a half from now.
According to the suit, Lucky's "unfair and anti-competitive practices must be stopped in that they not only affect the financial well-being of the marketplace by improperly destroying competition but they also harm consumers . . . and undermine the trust and confidence that the public places in the advertising of major supermarket chains."
The suit alleges that the exclusion from Lucky's price comparisons of the conventional Alpha Beta stores Food 4 Less operates overlooks "the savings realized by customers of supermarkets, including Alpha Beta, through the use of double coupons, which are not offered by Lucky."
Food 4 Less acquired Alpha Beta from Lucky's parent, American Stores Co., Salt Lake City, in June 1991. American's decision to sell the Alpha Betas followed a suit filed by California's attorney general that successfully blocked a merger of Alpha Beta into Lucky Stores.