Mathews Research

ADVISORY OPINIONS , 1039 Proposed price reporting service for retail chain food manufacturers. [File No. 783 7002, Mathews Research, September 29,

1978]
Advisory Opinion Letter
September 29, 1978
Dear Dr. Mathews:

This is in response to your request for advice concerning a proposed price reporting service for retail chain food merchandisers, ‘styled Full Range Market Monitor.

Your proposal contemplates that participating supermarket chains would furnish your firm, on a weekly basis, computer printouts listing all of the items sold in their stores together with the current selling price of each item. The prices supplied would be effective as of the date submitted but with no guarantee as to the length of time those prices would remain the same. This price information would be collated for release by your firm the third day after receipt. You have advised that the major chains in your area have indicated interest but are unwilling to provide price lists without a Commission opinion respecting possible law violation. It is proposed, as the Commission understands, that the price survey data would be available, not only to the participating food retailers, but to anyone willing to use the service at the established rates. This would include food and grocery manufacturers and suppliers, government, public service groups and individuals. Some purchasers of this information, such as manufacturers, might only wish to purchase the retail price data pertaining to their own product group or to obtain a partial report. Such purchasers, in addition, might not need the retail price information so promptly. However, you have indicated that participating retailers will need the reports promptly enough to enable timely price adjustments or permit contemporaneous questioning of suppliers concerning why a lower priced chain was able to obtain a supplier’s product for less. You have also inquired concerning the legal effect of particular variations in the proposed service. Two involved alternative methods of identifying the participating stores, by name or letter code; two related to limiting price survey data to only the participating retail chains; and one variation proposed the purchase of price data with a sale of the collated data back to the participating chains. None of

these variations would serve to alter the Commission’s basic concern with respect to the subject proposal.

Retail grocery price surveys which make available to consumers competitive price information, enabling them to better formulate purchasing decisions, are, in the Commission’s view, of benefit to consumers. and of benefit to retail level price competition. The Commission has no objection to such surveys. Nor would the Commission’s concern here be the same if the subject survey was limited to observed prices. However, your proposal goes beyond this by providing for the exchange of current weekly pricing schedules among competing retail grocery chains. Although the prices reported are subject to change at any time, they do reflect areawide pricing decisions by each chain involved in the program. Access to such ~ information over time might well enable a chain to anticipate the pricing patterns of its competitors and facilitate the coordination of future pricing decisions. Particularly in highly concentrated local markets (such as the Youngstown/Warren, Ohio market proposed by you as a test market) the danger that price stabilization would result is sufficiently great that the Commission is unable to approve the

subject proposal as presented.
By direction of the Commission.
Second Letter of Request
January 17, 1977