Albertson'S, Inc

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I:- THE MATTER OF ALBERTSON' , INC.

CONSENT ORDER, ETC., II\ REGARD TO ALLEGED VIOLATIONS OF THE FEDERAL TRADE COMMISSIOI\ ACT Ducket C-264.. Complainl, Mar. 4, 1975 - De6l:ion, Mal". 4, 1975 Consent order requiring a Boise, Idaho, chain of retail food stores, among other things to cease advertising merchandise at sale prices and having insufficient quantities available to meet demand. The order further requires respondent to include in advertisements statements a.s to the availability of advertised products, to mark advertised products with the advertised price, to make "rain checks" available and post notices to that effect, and to maintain surveilance on their stores to insure compliance with the provi.sions of the order. Appearances For the Commission: W. Lee Buck.

For the respondent: Robert W. Graham, Bagel, Gates, Dobrin Wakefield Long, Seatte, Wash. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Albertson, Inc. , a corporation, hereinafter sometimes referred to as respondent, has violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereto would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Albertson, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware with its office and principal place of business located at 1623 Washington St., Boise, Idaho. PAR. 2. Respondent is engaged in the operation of a chain of retail food stores, operating in the States of Washington, Oregon, Colorado Idaho, California, and other states in the United States. Its volume of business is substantial. In the operation of its retail food stores respondent offers and sells to its customers an extensive line of products, including food, as that term is defined in the Federal Trade Commission Act, groceries and other merchandise, all of which are sometimes referred to hereafter as "items." Some of said items are manufactured or processed by respondent at its manufacturing and processing plants located in various states. However, many of said 'U-'UU" '-'-H '- , U'''.

500 Complaint. items are purchased from numerous independent suppliers located throughout the United States.

PAR. 3. In the course and conduct of its business, as aforesaid respondent now causes, and for some time last past has caused, directly or indirectly, the aforesaid items to be shipped and distributed from its manufacturing and processing plants or from its other sources of supply to its warehouses, distribution centers, or retail food stores located in various states other than the state of origination, distribution or storage of said items. Respondent maintains, and at all times mentioned herein has maintained a substantial course of trade in the distribution, advertising, offering for sale and sale of the aforesaid items in commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 4. In the course and conduct of its business, as aforesaid, and for some time last past respondent has been and is now disseminating, and causing the dissemination of, certain advertisements concerning the aforesaid items by various means in commerce, as "commerce" is defined in the Federal Trade Commission Act, including but not limited , advertisements in newspapers of general and interstate circulation and other advertising media, for the purpose of inducing and which were and are likely to induce, directly or indirectly, the purchase of said items from respondent; and respondent has been and is now disseminating, and causing the dissemination of, advertisements concerning said items by various means, including but not limited to the aforesaid media, for the purpose of inducing and which were and are likely to induce, directly or indirectly, the purchase from respondent of the said items in commerce, as "commerce" is defined in the Federal Trade Commission Act. Many of the said advertisements list or depict tbe aforesaid items and also contain statements and representations concerning the price or terms at which said items would be offered for sale. Many of the aforesaid advertisements contain further direct and express statements and representations concerning the time periods during which the offers would be in effect and the locations of respondent' s food stores at which the offers would be made. PAR. 5. Through the use of such advertisements disseminated and now being disseminated in various areas of the United States served by respondent' s retail food stores, respondent has represented and is now representing directly or by implication that in those stores covered by such advertisements during the effective periods of the advertised offers, the items listed or depicted in such advertisements would be or are:

Readily available for sale to customers;

Complaint 85 I'.

B. Conspicuously available for sale at or below the advertiscd prices; and C. Sold to consumers at or below the advertised price. PAR. 6. In truth and in fact, in a number of respondent' s retail food stores located in the Portland, Oreg.; Seattle, Wash.; and Denver, Colo. metropolitan areas in which the aforesaid advertisements were disseminated, in stores covered by such advertisements, during the effective periods of the advertised offers, a substantial number of items listed or depicted in the said advertisements were or are: A. Not readily available for sale;

B. Not conspicuously available for sale at or below the advertisedprices; or C. Sold to customers at a price higher than the advertised price. Therefore, the statements and representations as referred to herein were and are false, misleading and deceptive, and each of such advertisements was and is misleading in material respects and constituted, and now constitutes a "false advertisement " as that term is defined in the Federal Trade Commission Act. PAR. 7. By disseminating or causing the dissemination of advertisements which offer or present for sale items as aforesaid, and by failing to have in each of its stores covered by such advertisements, during the effective periods of the advertised offers, in quantities sufficient to meet reasonably anticipated demands, the advertised items: A. Readily available for sale to customers; or B. Conspicuously availablc for sale at or below the advertised prices;

respondent has been and now is engaged in unfair acts and practices. PAR. 8. By disseminating or causing the dissemination of advertisements which offer or present for sale items at specific prices, as aforesaid, and during the effective periods of such advertised offers at certain stores covered by said advertisements, by sellng said items or other merchandise to customers at prices higher than the advertised prices, respondent has been and now is engaged in unfair acts and practices.

PAR. 9. In the course and conduct of its business, and at all times referred to herein, respondent has been and now is in substantial competition in commerce, with corporations, partnerships, firms and individuals in the retail food and grocery business. PAR. 10. The use by respondent of the aforcsaid unfair and false misleading and deceptive statements, representations, acts and practices, including the dissemination of the aforesaid "false advertisements " has had and now has the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken I'lLDI';I\li:Vj, Ij lJ. uU,) 500 Decision and Order belief that the said statements and representations were and are true and to induce such persons to go to respondent' s stores and to purchase from respondent substantial quantities of the advertised items at prices in excess of the advertised prices and substantial quantities of items other than the advertised itcms.

PAR. 11. The acts and practices as aforesaid, and the dissemination by respondent of the false advertisements, as aforesaid, were and are all to the prejudice and injury of the public and of respondent' competitors and constituted and now constitute unfair methods of competition in commerce and unfair or deceptive acts or practices in commerce in violation of Sections 5 and 12 of the Federal Trade Commission Act.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Seattle Regional Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint and waivers and other provisions as required by the Commission rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty days, and having duly considered the comments filed thereafter pursuant to Section 2.34(b) of its rules, now in further conformity with the procedure prescribed in Section 2.34(b) of its rules the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order: A. Respondent' Albertson, Inc. is a corporation organized, existing; and doing business under and by virtue of the laws of the state Delaware with its office and principal place of business located at 1623 Washington St., Boise, Idaho.

504 FElJi'I AL TRADE COMMISSION DECISIONS Decision and Order 85 V. B. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER It is ordered That respondent Albertson, Inc., a corporation, its successors or assigns, its officers, agents, representatives and employ ees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, offering for sale, sale or distribution of food or grocery products or other merchandise hereafter sometimes referred to as items, offered or sold in its retail stores, in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from, directly or indirectly:

A. Disseminating, or causing the dissemination of any advertisement by any means which offers any items for sale at a stated price unless during the effective period of the advertised offer at each retail store covered by the advertisement:

1. Each advertised item is readily available for sale to customers in the public area of the store, or if not readily available there, a clear and conspicuous notice is posted where the item is regularly displayed which states that the item is in stock and may be obtained upon request, and said item is furnished on request; 2. There is a sign or other conspicuous marking at the place where an item advertised below regular shelf price is displayed for sale clearly disclosing that the item is "as advertised" or "on sale" or words of similar import as appropriate, and disclosing on such sign or marking, the advertised price;

3. Each advertised item, which is usually and customarily individually marked with a price, is individually, clearly, and conspicuously marked with the advertised price;

4. Each advertised item is sold to customers at or below the advertised price;

The Commission recognizes that technical per se violations of Section I of this order are inevitable despite the honest best efforts of respondent to ensure availabilty and proper pricing of advertised items. Therefore, in determining compliance with Section I of this order, the Commission wil consider (a) all circumstances surrounding nondelivery of advertised products which were actually ordered in quantities sufficient to meet reasonably anticipated demands but were not delivered due to circumstances beyond respondent' s control, and (b) ALBERTSON' , INC. 505 500 Decision and Order all circumstances surrounding failure to make advertised items conspicuously and readily available for sale at or below the advertised prices due to circumstances beyond respondent's control. Provided It shall constitute a defense to a charge of unavailability under subparagraph l.A_I. if respondent maintains and furnishes or makes available for inspection and copying upon the request of the Federal Trade Commission, such records and affidavits as wil show that (a) the advertised items were delivered to its stores in quantities sufficient to meet reasonably anticipated demand, or (b) the advertised items were ordered but not delivered due to circumstances beyond respondent' s control, and that respondent, upon notice or knowledge of such nondelivery acted immediately to contact the media to correct the advertisement or proposed advertisement to reflect the limited availability or unavailability of each advertised item, and (c) respondent immediately offered to customers on inquiry a "rain check" for each unavailable item which entitled the holder to purchase the item in the near future at or below the advertised price. Provided Further, that it shall not be deemed a violation of subparagraphs LA. , LA. , LA. , or LAA., if respondent is complying with aspecific exemption, limitation or restriction with respect to store item or price which is clearly and conspicuously disclosed in all advertisements for the product in question. II.

It is further ordered That respondent Albertson, Inc., a corporation its successors or assign its officers, agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, offering for sale, sale or distribution of food or drugs, as those terms are defined in the Federal Trade Commission Act, do forthwith cease and desist from: A. Disseminating or causing to be disseminated, by United States mails or by any means in commerce, as "commerce" is defined in the Federal Trade Commission Act, for the purpose of inducing, or which is likely to induce, directly or indirectly the purchase of any such product any advertisement which contains any of the offers prohibited by Section I of this order;

B. Disseminating or causing to be disseminated by any means, for the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase of any such product in commerce, as commerce" is defined in the Federal Trade Commission Act, any advertisement which contains any of the offers prohibited by Section I of this order.

506 VEDERAL TRADE COMMISSION Di'CISIONS Decision and Order H5 F.

Ill.

I t is further ordered That throughout each ad vertiscd sale period in each of its retail stores covered by an advertisement, respondent shall post conspicuously (1) at or near each doorway affording entrancc to the public, and (2) at or near the place where customers pay for merchandise, notices which contain the following: A. A copy of the advertisement.

B. A statement that: "All items advertiscd are readily available for sale at or below advertised price except the following items: Rain checks will be gladly issued for these items, that wil enable you to purchase these items at or below the advertised price in the near future. If you have any questions, the store director will be glad to assist you.

IV.

It is further ordered That respondent shall cause the following statement to be clearly and conspicuously set forth in each advertisement which represents that items are available for sale at a stated price at any of its stores: "Each of these advertised items is required to be readily available for sale at or below the advertised price in each Albertson s store, except as specifically noted in this ad. It is further ordered That:

A. Respondent shall forthwith deliver a copy of this order to each of its operating divisions and to each of its present and future officers and other personnel in its organization down to the level of and including assistant store directors who, directly or indirectly, have any supervisory responsibilities as to individual retail stores of respondent or who are engaged in any aspect of preparation, creation, or placing of advertising, and that respondent shall secure a signed statement acknowledging receipt of said order from each such person; B. Respondent shall institute and maintain a program of continuing surveilance adequate to reveal whether the business practices of each of its retail stores conform to this order, and shall confer with any duly authorized representative of the Commission pertaining to such program when requested to do so by a duly authorized representative of the Commission;

C. Respondent shall, for a period of three (3) years subsequcnt to the date of this order:

1. Maintain business records which show the efforts taken to insure continuing compliance with the terms and provisions of this order; HUGH MOONEY tla ORGANIC MASQUE CO. 007 007 Complaint 2. Grant any duly authorized representative of the Federal Trade Commission access to all such business records; 3. Furnish to the Federal Trade Commission copies of such records which are requested by any of its duly authorized representatives; D. Respondent shall, all other provisions of this order notwithstanding, on or before each of the first three (3) anniversary dates of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order in thc preceding year.

It is fu.rther ordered That respondent shall notify the Commission at least thirty days prior to any proposed change in the corporate respondent, such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the respondent which may affect compliance obligations arising out of this order. It is fu.rther ordered That respondent shall, within sixty days after service upon it of this order, file with the Commission a written report setting forth in detail the manner and form of its compliance with this order.