Safeway and the federal Trade Commission have agreed on a constant order that requires the food chain to sell advertised items at or below the advertised prices.
Announcement was made yesterday of the government's provinsional acceptance of a consent order Safeway Stores, Inc., proposed last April, one day before its case was to go to trial.
Under the order's provisions, Safeway must post copies of food advertisements in its stores and notices to customers encouraging them to check the prices. It must also maintain "a surveillance program adequate to reveal whether it is in compliance with the order."
Safeway's corporate headquarters in Oakland, Calif. issued the following statement:
"The proposed order provides for policies and practices which Safeway is already following. The agreement . . specifies that there's no admission of a violation (of FTC law) on our part and it is for settlement purposes only. We feel that resolving the controversy in this manner is fair to everyone and that it will prevent needless, expensive litigation."
The complaint that Safeway was allegedly not selling items at advertised prices resulted from a 1973 FTC survery of grocery stores across the country. If found that 3 per cent of its items were either unavailable or marked with higher than advertised prices. The complaint, brought in September 1975, is based solely on pricing, not availability.
(Four Safeway stores surveyed in the Washington area were found to have less than 1 per cent (0.9) of the items were overpriced, while another 0.7 per cent were underpriced. Unavailable items were put at 2.3 per cent.)
Thus far the FTC has brought eight or nine actions against chain stores as a result of that survey. The Great Atlantic & Pacific Tea Co., Inc. (A&P), where 13 per cent of the items were too high or scarce, fought the FTC's complaint, but lost in a hearing before an administrative law judge and was ordered to cease and desist. This is the action Safeway sought to avoid by proposing consent.
Safeway, the largest supermarket chain, operates about 2,400 stores in 30 states. The 1973 FTC survey included 641 retail stores of 74 chains in 40 cities. The survey was prompted by a 1971 FTC rule that requires food stores to have on hand sufficient quantities of products they advertise on special or face the possibility of being charged with false advertising.