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Food 4 Less Wants Injunction Against Lucky : Supermarkets: It will ask the courts to prohibit its rival from claiming to be the 'low price leader' among grocery chains.

July 02, 1994|GEORGE WHITE | TIMES STAFF WRITER

As part of a novel and possibly precedent-setting attack on a competitor's pricing claims, Food 4 Less Stores plans to seek a court order Tuesday prohibiting Lucky Stores from calling itself the "low price leader."

Lawyers for Food 4 Less said they will amend a $100-million false-advertising lawsuit filed against Lucky in March by seeking an injunction that would bar Lucky from calling itself the "low price leader every day."

Food 4 Less contends that overall prices at its warehouse stores are lower than Lucky's and that the Lucky ads are therefore false.

Industry analysts said a lawsuit on price comparisons is virtually unprecedented in retailing.

"If Food 4 Less wins the suit, it could start a major trend in the industry," said Gary Giblen, a supermarket analyst at PaineWebber. "A number of retailers would begin to turn to the courts to resolve pricing issues and other disputes."

The litigation is the latest salvo in an escalating price war among supermarket chains in the Southland. Lucky, a subsidiary of Salt Lake City-based American Stores, operates 239 stores in Southern California. La Habra-based Food 4 Less runs 28 discount supermarkets under the Food 4 Less name in Southern California, and also operates 24 Boys, 15 Viva and 133 Alpha Beta stores in the region.

The dispute involves an advertising campaign Lucky launched in February, 1993, when it announced it was lowering prices on 2,500 items.

Lucky spokeswoman Judy Decker said Lucky had compared its prices to those of Alpha Beta, Vons and Ralphs, but had never run ads comparing them to those at Food 4 Less warehouse stores. She also said the Lucky advertisements are based on a price survey conducted by an independent company four to five times a year.

"We contend that their case is without merit, and we are confident that the integrity of our advertising will be upheld in court," Decker said. Lucky has asked the court to dismiss the suit, contending there is insufficient evidence.

In seeking the injunction, Food 4 Less says Lucky's allegedly false advertisements are hurting consumers.

"These unfair and anti-competitive practices must be stopped in that they not only affect the financial well-being of the marketplace by improperly destroying competition, but they also harm consumers throughout the state . . . and undermine the trust and confidence that the public places in the advertising of major supermarket chains," it said.

But Henry Clark, a business ethics professor at USC, said Food 4 Less could benefit even if it loses the suit. "This is part of a (Food 4 Less) strategy to get more publicity," he said.

Clark added that the Southland's supermarket industry will monitor the legal dispute closely because a ruling could affect future advertising practices.

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