Peapod, Stop & Shop Produce Refunds
Under pressure from the Massachusetts Attorney General, online grocer Peapod and supermarket chain Stop & Shop have
earmarked $200,000 for Boston-area customers who complained about unclear pricing.
“Peapod’s 5,700 home delivery shoppers believed they were buying groceries at the same prices they would pay at Stop & Shop,” Attorney General Tom Reilly said. “We want to make sure that when consumers use Peapod they get the prices advertised.”
Chicago-based Peapod and Quincy, Mass.-based Stop & Shop denied any allegations of wrongdoing. Both are owned by Ahold, the world’s second-largest food
retail and food service company, based in the Netherlands.
The companies will also pay about $50,000 in civil penalties and lawyer’s fees. The agreement was filed today in Suffolk (County) Superior Court.
“As confusion over pricing may have resulted in the Boston marketplace from Peapod customer communications, we will compensate those customers who shopped
online with Peapod between Feb. 1, 1999 and Sept. 4, 1999 and had their orders fulfilled from our Watertown distribution center,” the companies said.
The funds will be distributed to customers based on purchases during the eight-month stretch in question. Peapod is examining records to determine the
refunds.
Peapod has also placed a statement on its Web site to notify customers that the prices of Stop & Shop groceries purchased through Peapod may be different from
prices in Stop & Shop retail stores.
“Peapod and Stop & Shop did not intend to confuse Peapod customers, and we apologize for any misunderstanding,” said Marc van Gelder, Peapod’s
president and CEO.
The company is one of the survivors of the online grocery business. Many of its peers, including ShopLink and Streamline.com, both of Westwood, Mass., folded because of low profit margins and an inability to raise additional venture capital.
Also among the casualties was HomeRuns.com, of Somerville, Mass.