Gas Discounts Rile Competitors
A California judge has ordered one Safeway store in Hollister, CA, to stop selling gasoline below cost in response to a year-old suit from a local competitor. The suit, filed in May 2004 by Dassel’s Petroleum, Inc., contends that Safeway’s three-cent-per-gallon discount for Safeway Club cardholders puts the price below Safeway’s cost and undercuts competitors’ prices, per news reports.
Cardholders get a six-cent-per-gallon discount when they spend $50 or more at Safeway.
The San Benito County Superior Court judge issued an injunction against Safeway as the case awaits a trial date, per news reports. It’s only illegal to sell gas below cost if it’s done with the intent to harm competitors.
A similar feud sprung up in Pittsburgh in March, when the Petroleum Retailers and Auto Repair Association of Pittsburgh complained to the state attorney general about grocer Giant Eagle’s loyalty program “fuelperks!,” which gives members 10 cents off each gallon of gas at Giant Eagle’s GetGo c-store division for every $50 they spend at the supermarket (March 30 P&I). The Pennsylvania AG has taken no action on that complaint.
