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Peapod and Stop & Shop Announce Accord with Massachusetts Attorney General Regarding 1999 Customer Communications

CHICAGO and QUINCY, Mass. - Online grocer Peapod Inc., and the Stop & Shop Supermarket Company announced on Monday that they have entered into an assurance with the Massachusetts Attorney General and have agreed to compensate certain Boston-area customers who shopped with Peapod during an eight-month period in 1999, when customer communications may have unintentionally caused confusion regarding Peapod's local pricing.

"Peapod and Stop & Shop deny all allegations of wrongdoing by the Massachusetts Attorney General, and assert that they did not act unfairly or mislead Peapod customers in 1999," the companies said in a joint statement. "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 outside Boston."

Peapod and Stop & Shop have established a $200,000 escrow fund that will be distributed among affected customers depending on their purchase levels during the eight-month time period. Peapod is in the process of examining its records to determine which customers were affected. If the entire escrow amount is not fully distributed to affected Peapod customers, Peapod and Stop & Shop will donate the remainder to the Massachusetts Attorney General's Local Consumer Aid Fund.

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 by Stop & Shop is successful because we offer a time-saving service at a good value to our customers," said Marc van Gelder, Peapod's president and CEO. "We have thrived in this challenging market because our customers recognize the value of the service we provide, and our business continues to grow. Peapod and Stop & Shop did not intend to confuse Peapod customers, and we apologize for any misunderstanding."

Both Stop & Shop and Peapod are wholly owned subsidiaries of Ahold, the world's second-largest food retail and foodservice company, based in the Netherlands.
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