Price War in Texas

When some Texas grocers complained earlier this year of price-slashing by Safeway Stores Inc., the Justice Department assigned five antitrust investigators to look into the chain's operations. The outcome: a federal grand jury in Fort Worth last week charged that Safeway's price cuts (10 Ib. bag of sugar: 69-c-) were an attempt to monopolize the retail grocery business in Texas and New Mexico cities.

In a three-count criminal indictment, Safeway was charged with waging price wars, selling goods below cost, and charging less for some items in Texas than it does elsewhere in the U.S. The indictment also charged that Safeway, with 150 stores in 90 Texas and New Mexico cities (1954 gross: more than $155 million), made its store managers meet individual sales quotas that represented from 25% to 50% of the total retail grocery business in some areas. Safeway denied any antitrust violations, said its policy is to "meet competitors' prices and not lead them downward." Meanwhile, 157 Abilene area grocers have filed a $166,000 civil suit against Safeway for losses incurred during a price war in which one independent grocer was forced out of business.

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