Grand Union, Pantry Pride Supermarkets and Peoples Drug Stores announced yesterday that they are freezing prices temporarily on some of their house brand products to help slow inflation.
The freeze at Grand Union and Pantry Pride on such grocery goods as shortening and peanut butter began yesterday and will remain in effect for 30 days. Peoples Drug Stores' program, which covers all prescription drugs and house brand groceries, will start Wednesday and continue for 90 days.
"We are taking this unprecedented action in a spirit of cooperation with the federal government's current efforts to stem the rising rate of food inflation," said James Wood, chairman and chief executive officer of the Grand Union company. Other chain officials offered the same reasons for their programs.
The chains join three other major Washington-area chains that announced price freeze plans. Safeway and A & P have begun 30-day freezes on some of their private label groceries. Giant Foods begins a price freeze Sunday that will continue for 21 weeks. Giant's plan will cover regular ground beef and some prescription drugs as well as house brand staples, canned goods and commodities.
The supermarkets said they initiated their freezes after receiving letters and telephone calls from Esther Peterson, the president's special adviser on consumer affairs.
Peterson wrote to 50 chains throughout the country asking them to set up a system of voluntary controls on commonly purchased food products to ease inflation pressures on consumers.
Except for a few national brand items in the Giant freeze, the companies are freezing prices only on private label and generic label groceries.
The private label goods include such items as Safeway's Scotch Buy flour, A & P Ann Page canned goods and Giant's Giant Food products. Generic label groceries, which consist mainly of canned and packaged goods, do not have any store label or national label. Instead, generic label products are wrapped plainly, usually in white labels and black print that states simply the type of products such as "green peas."
National brands are not included in any of the freeze plans, with the exception of Mohawk canned hams and Armour frozen turkeys at Giant.
About 20 percent of Grand Union's annual grocery sales are derived from private label brand sales, a company representative said. No produce, dairy or meats are included in the freeze.
Grand Union has 51 stores in the Washington area. The company also has two J. Weingarten supermarkets on Maryland's Eastern shore.
Pantry Pride has 52 Maryland and Delaware stores. Among the generic products included in the Pantry Pride freeze are oils, shortenings, preserves, peanut butter, mayonnaise, macroni products, paper products, and rice.
During a White House press conference yesterday, Peterson praised the price freeze programs that have been instituted and quoted President Carter as saying that "This kind of voluntary action is better than wage and price controls."
No mention was made of the Kroger supermarket chain, a Midwestern and Southern company which decided not to freeze prices as Peterson had suggested.
A Kroger representative said low prices are part of that company's merchandising policy, thereby voiding "this [freeze proposal] is unnecessary and not meaningful for customers."
So far, 10 chains throughout the United States have announced price freezes. Besides the Washington area stores, they include Meijer Inc. of Grand Rapids Mich.; Fisher Foods, a Midwestern company; Chatham Super Markets of Warren, Mich.; and Foodland International of Belle Vernon, Pa.
Peoples Drug Stores joined the price freeze movement even though it never received a formal invitation.
"The White House didn't contact us -- but we decided to have a freeze on all prescription drugs, all prescriptions eyeglasses and all private label brand products we have in our stores," said Joe Pollard, the chain's advertising director. Peoples has 130 stores in the Washington area.
About 20 per cent of the chain's sales are from prescription drugs, Pollard said.