Did Safeway Sell Gas Below Cost to Hurt Campbell Gas Stations?

A group of gas stations said in a 2008 lawsuit that Safeway's gas discount program was clearly offering fuel at below-cost, which was driving away loyal customers and costing hundreds of thousands of dollars in lost business.

That lawsuit is still ongoing, despite Safeway ending the 3-cent Club Card discount last year, and was scheduled to go to trial in Alameda County Superior Court Tuesday.

"Since at least 2007 and earlier the Safeway stations have been the low price leader in the survey area by wide margins over other stations," the original 2008 lawsuit against Safeway says. "Plaintiff has reason to believe that the Safeway stations are selling one or more of its grades of fuel at prices below its cost when compared to the fuel retail price with available discounts."

The lawsuit was filed by Dixon Gas Club, and 14 other stations, according to court documents. Campbell has a Safeway gas station at 955 W. Hamilton Ave., which opened in 2010.

The lawsuit alleges Safeway participated in unlawful business practices and sold its gas as a "loss leader" to promote the sales of other items, which is illegal.

The Dixon station says it has lost at least $250,000 because of customers migrating to Safeway. The lawsuit asks for damages to be paid by Safeway.

Do you get cheap gas at the Safeway on Hamilton Avenue? Do you think this is a legitimate lawsuit? Tell us in the comments!

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