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Grocery Outlet, which has made news with its efforts to use the Lucky trademark that it believes Albertsons let lapse, announced yesterday that it plans to triple its Lucky store count.

The company plans to convert an existing Grocery Outlet unit in Vacaville, California, to the Lucky name within the next 60 days, and then open a new ground-up unit in San Leandro, California, by mid-September. Both units will, according to the company, feature fresh meat, expanded produce, wine, cheese, and deli, as well as everyday low pricing.

It was just a month ago that Grocery Outlet instigated a legal battle by using the Lucky banner on one of its newly renovated stores in Rocklin, California, saying that because Albertsons hadn't used the name for six years it no longer had legal rights to the name. Grocery Outlet has been citing federal law, saying that companies that do not use trademarked names for three years then lose exclusive rights to those trademarks.

Albertsons, which inherited the Lucky brand when it acquired American Stores, had in fact stopped using the brand – though this hasn't prevented it from trying to maintain rights to the name through legal recourse. The company also is trying to find some evidence anywhere that it hadn’t completely abandoned the brand, though Grocery Outlet's investigators are confident that no such evidence exists. A federal judge in San Francisco denied Albertsons a temporary restraining order that would have kept Grocery Outlet from using the name, but there likely will be numerous court dates before any sort of final decision is reached.

Furthermore, Grocery Outlet has filed a lawsuit against the larger retailer charging it with trademark infringement and unfair competition. The filing, in part, says that Albertsons' actions in the Lucky case "are likely to cause confusion, to cause mistake, and/or to deceive customers and potential customers of the parties, at least as to some affiliation, connection, or association of defendants with Grocery Outlet, or as to the origin, sponsorship, or approval of defendants’ goods, services, or commercial activities by Grocery Outlet."

These two new stores appear to be Grocery Outlet's way of dealing with last week's Sacramento Bee report that at least some consumers were disappointed by the new Lucky store. "While some shoppers welcomed the wider aisles, cleaner look and improved selection in certain departments, others came away disappointed," the Bee wrote, and "some shoppers complained that the new Lucky is too similar to the old Grocery Outlet – far smaller, at 13,500 square feet, than most supermarkets, and lacking many of the amenities, like a deli counter, that consumers want."
KC's View:
As we've said all along, not having any legal training, we have no idea how this will turn out in the courts.

But almost nobody we've spoken to disagrees that Albertsons did a lot more than let the trademark lapse – it contemptuously discarded what in California was a respected and longstanding retail brand name.

And here's the real lesson to the folks at Albertsons and at other chains who believe they are smarter than consumers. Even after a half-dozen years without having a Lucky store to go to, some shoppers had such strong recollections of and connections to the Lucky concept that they were disappointed by a store that did not live up to that tradition.

How the legal case will turn out is one thing. But when it comes to customer contempt and brand stupidity, Albertsons is guilty.