05/12/2023

Albertsons Cos. to Pay $107M in BOGO Lawsuit

Oregon shoppers accuse food retailer of falsely advertising certain meat products

Digital Editor

Safeway stores in Oregon were accused of deceptive practices in their BOGO promotions.

Safeway and its parent company Albertsons Cos. recently agreed to pay $107 million to resolve claims that they falsely advertised some products with “buy one get one” (BOGO) sales in Oregon.

Two shoppers filed a class action in 2016. The lawsuit alleges that Safeway and Albertsons Cos. violated Oregon law by raising the price of certain meat products sold in their “Buy One, Get One Free” and “Buy One, Get Two Free” promotions. According to the suit, “When Albertsons and Safeway stores offer meat products under these promotions, they raise the unit prices of the original meat product above the regular retail price. Thus, consumers are actually paying for the meat that is sold as ‘free’ in these special sales.” The deal was specifically aimed at Club Card members.

Safeway and Albertsons Cos. haven’t admitted any wrongdoing but agreed to a $107 million settlement to resolve the false-sale class action lawsuit.

Under the terms of the settlement, Oregon customers who participated in the BOGO sales using a Safeway Club Card between May 4, 2015, and Sept. 7, 2016, are eligible to receive payment of approximately $200.

Another class action has been filed last month in Washington state against Safeway and Albertsons Cos. regarding BOGO deals there.

Meanwhile, Albertsons Cos. recently reported its fourth quarter earnings for the period ended Feb. 25. The company’s net sales and other revenue were $18.3 billion, compared with $17.4 billion year over year. The increase was driven by a 5.6% increase in identical sales, spurred by retail price inflation, growth in pharmacy and increasing digital penetration.

Also in Q4, digital sales increased 16%; loyalty members increased 15% to more than 34 million; net income was $311 million; or 54 cents per share; and adjusted EBITDA was $1,050 million.

Boise, Idaho-based Albertsons operates more than 2,200 retail stores with 1,700-plus pharmacies, 402 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities. It has stores across 34 states and the District of Columbia under 24 banners, among them Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Markets and Balducci’s Food Lovers Market. Albertsons is No. 9 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America.