Overcharging by Safeway and other retail sins

12/30/2012 02:13:00 PM
Tom Karst

National Editor Tom KarstIf a retailer is shafting its customers, can suppliers trust it?

I was reading a  recent story about Safeway overcharging customers, despite a 2008 settlement okayed by the CDFA that indicated the chain's responsibility to take corrective measures.

Checking out the 23 reader comments in the November KCBS story, I don't get the feeling there is a lot of goodwill toward Safeway on the issue right now.

From that November KCBS  story:

As a result of the most recent judgment against the supermarket chain (.pdf), if an item under $5 scans at the register for more than the lowest advertise price, Safeway and Vons must give the customer the item for free (limit 1 item – the other items must be given at the lowest advertised price). If an item is over $5, Safeway is supposed to give the customer a $5 gift card. The judgment excludes dairy, alcohol, tobacco, fuel and pharmacy products.

“In all the years I’ve called them this I’ve never gotten the item for free,” complained John Mortimer of San Francisco who says he is regularly overcharged at Safeway.

“They just kinda unhappily give me the difference,” added a San Jose Safeway shopper who asked to remain anonymous.

 

KCBS updated their coverage Dec. 19, with a story titled "ConsumerWatch: Safeway Stores May Be More Likely To Overcharge."

The same story referred to a state of California Department of Food and Agriculture survey of retail price accuracy throughout the state. That survey showed that retailers were more than twice as likely to overprice as underprice. And another county  survey of Safeway showed that those stores were four times as likely to overcharge as undercharge.

Sure, there are a lot of complexities in supermarket pricing models - true sales, loyalty cards, PLU numbers (!!) price reduced,  advertised price, etc. But if Safeway is overcharging some customers (still), how safe should suppliers feel in the supermarket accounting department when it comes to promotional funds supplied by fresh produce marketers?

Much safer than in Cyprus, I would wager. From a story in The Cyprus Mail, description of the  crisis for retailers and the untenable fiscal situation that suppliers find themselves.  Photos Photiades, founder of the Photos Photiades Group. and author of the piece, spoke of the repercussions of a bankruptcy of a larger retailer in Cyprus. The market power of the major supermarkets has allowed them to demand credit terms from three to eighteen months after delivery, he said. That has made the supermarket irresponsible with the investments they make.  From the story:


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