Grocery Outlet Sued Over False Savings, 'Fictitious' Price Comparisons

Newsweek

14 hours ago

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Grocery Outlet, a discount supermarket chain known for its "Bargain Market" branding, is facing a class-action lawsuit in Oregon over allegations of deceptive pricing practices.
Newsweek contacted Grocery Outlet for comment via email outside of usual working hours on Saturday.
Why It Matters
Grocery Outlet Inc. is a California corporation that does business in Oregon through its branded grocery outlet locations. Since 1971, Oregon law has protected consumers from the use of unfair and deceptive reference pricing practices.
The lawsuit, as reported by Grocery Dive, was filed in Multnomah County Circuit Court on Monday and claims that the retailer systematically used fabricated "elsewhere" prices to create the illusion of significant savings, violating Oregon's Unlawful Trade Practices Act.
"This putative class action arises from a widespread and coordinated scheme by Grocery Outlet Inc. and its affiliated Oregon operators to mislead consumers through the use of fictitious 'elsewhere' pricing," the lawsuit states.
"Defendants systematically advertised grocery items with inflated or fabricated reference prices—purportedly representing competitor pricing—without identifying the source of those comparisons, as required by Oregon law," the lawsuit adds.
"These deceptive practices created the illusion of significant savings," the filing continued, "when, in fact, consumers often paid the same or more than they would have at other local retailers."
The lawsuit claims that Grocery Outlet's pricing strategy violates "multiple provisions of Oregon's Unlawful Trade Practices Act and related regulations, including prohibitions against false or misleading price comparisons and requirements for transparency in advertising discounts."
File photo: The exterior of a Grocery Outlet store is seen on February 25, 2025 in San Rafael, California.
File photo: The exterior of a Grocery Outlet store is seen on February 25, 2025 in San Rafael, California.What To Know
The complaint has been brought by three Oregon consumers, named as Schearon Stewart, John Franz, and Roger Sullivan, and represented by OCJ Law, P.C., in partnership with Oregon Consumer Justice.
The complaint alleges that Grocery Outlet advertised inflated or fictitious reference prices without identifying the source of those comparisons, as required by Oregon law. In some instances, the lawsuit claims that the "elsewhere" prices cited by the retailer were higher than the actual prices offered by nearby competitors.
The filing alleges that "the violations are rampant within the stores," citing as an example: "Tide pods at Grocery Outlet in King City are sold for $12.99 with a stated 'elsewhere' price of $18.99." However, the lawsuit cites that "there is no competitor in the same geographic area called 'elsewhere' and the reference price use of that term is prohibited by Oregon law.
"Second, a survey of the grocery stores in the same geographic area shows the actual prices of that same product never approached $18.99. Instead, at the nearest competitors it was priced for $12.99 (Fred Meyers) and $12.97 (Walmart)."
File photos: One of the "elsewhere" signs named in the lawsuit is seen on display; and the exterior of Grocery Outlet in Salem, Oregon.
File photos: One of the "elsewhere" signs named in the lawsuit is seen on display; and the exterior of Grocery Outlet in Salem, Oregon.
Lawsuit/ Google street view/Lawsuit/ Google street view
"These deceptive practices created the illusion of significant savings, when in fact, consumers often paid the same or more than they would have at other local retailers," the lawsuit alleges, as reported by Supermarket News.
Law firm Tycko & Zavareei LLP said that the lawsuit seeks injunctive and equitable relief to stop the alleged unlawful conduct and hold Grocery Outlet accountable. Plaintiffs intend to amend the complaint to seek monetary damages on behalf of the class after the statutory notice period under Oregon law has expired.
What People Are Saying
F. Peter Silva II, attorney at Tycko & Zavareei LLP, said: "This case is about fairness and transparency. Oregon law is clear: if you advertise a discount, you must be honest about where that comparison comes from. Grocery Outlet's use of vague and unverifiable 'elsewhere' prices deprived consumers of the ability to make informed purchasing decisions and unfairly competed with other businesses."
What Happens Next
The lawsuit states the plaintiffs, "representing a class of similarly situated Oregon consumers, seek injunctive and equitable relief to halt these practices and hold Defendants accountable for the financial harm caused by their unlawful conduct."
The case adds to Grocery Outlet's legal troubles, as the company is dealing with a separate lawsuit, filed earlier this year, relating to security fraud.
The lawsuit is the latest in a series targeting grocers over their pricing and promotional tactics.
Last year, as reported by Grocery Dive, Albertsons agreed to a $3.9 million settlement following a civil complaint that claimed the retailer unlawfully overcharged customers. More recently, Publix was hit with a class-action lawsuit alleging it overcharged shoppers for discounted items sold by weight, including meats, cheeses, and deli products.