N.J. Gas Stations Charged After Violations
Newark, N.J., New Jersey became the first state to take legal action in response to steeply inflated gas prices when state attorney general Peter C. Harvey alleged in court that 20 N.J. gas stations and their oil suppliers violated a state law that forbids multiple price increases in a single day.
Harvey charged that several stations hiked their prices as many as four or five times in one day as Hurricane Katrina wreaked havoc on the oil industry. According to the report, some stations even charged credit-card users more than the receipt amounts; others secretly substituted regular gas for premium.
Many of the accused station owners said that they were unaware of the law against price increases, while others defended their actions as necessary in the face of rising wholesale prices.
New Jersey remains the only state with a law against multiple daily increases in gas prices. The New York Times reports that the law was put in place in 1938 to protect small operators from larger companies during price wars.
Walgreen 4Q Profit Hurt by Katrina
Chicago, Walgreen Co. reported a slim rise in its fourth-quarter profit and said sales were slowed by Hurricane Katrina and consumers’ increasing preference for generic prescription drugs over more costly name-brand ones.
Quarterly profit rose to $329 million, or 32? a share, for the fourth quarter, ended Aug. 31, from $324.4 million, or 32? a share, a year earlier. The increase in earnings was the smallest since the 1999 fourth quarter. Sales were $10.49 billion, up 11.3% from $9.43 billion a year ago, but $100 million less than analysts predicted.
Results included a $54.7 million pretax charge for expenses related to Hurricane Katrina damage, which cut quarterly earnings by 3? per share. The hurricane forced Walgreen to shut down approximately 74 stores in the Gulf region. Currently, 32 stores remain closed in New Orleans and the surrounding area.
The chain said it remains on plan to open 475 new stores in fiscal 2006—for a record net increase of 390—after 435 new-store openings in 2005.
“We’re in excellent shape to continue our expansion plans while investing in new store technology and customer-service initiatives,” chairman and CEO David Bernauer said. The retailer projected $1.4 billion in capital investments for fiscal 2006.
American Eagle Outfitters Launches Loyalty Program
Warrendale, Pa., American Eagle Outfitters has debuted its AE All-Access Pass, a loyalty card that allows consumers to earn credits toward rewards by shopping at the retailer’s stores or Web store.
Members will receive reward certificates every three months to coincide with the release of new seasonal collections. The value of the certificates will vary depending on how much the consumer spent. Members also will receive special offers and 15% discounts on their birthdays.