Seattle-based Replenium alleges Albertsons induced it to share trade secrets the grocer then misappropriated to build its own e-commerce system before terminating their agreement.

What You Need to Know

• Replenium says it developed a unique “auto-replenishing” shopping tool for Albertsons.
• The company stood to recoup its development costs through sales-based service fees.
• Replenium says its tech was used by Albertsons to create its ‘Schedule & Save’ tool.

A Seattle company has sued Albertsons, alleging the grocery chain operated in bad faith by inducing it to develop an innovative e-commerce platform that it ultimately stole before suddenly terminating their partnership agreement.

Replenium, represented by Lawrence Locker and Rebecca Singleton of Summit Law Group and Jason Spiro of Spiro Harrison & Nelson, filed the complaint Monday in the U.S. District Court for the Western District of Washington in Seattle. It seeks to recover losses suffered due to Albertsons’ alleged misappropriation of trade secrets, breach of contract, unfulfilled promises and unjust enrichment. Summit Law Group did not immediately respond to a request for comment.

The suit centers on Replenium’s three-year effort to build an e-commerce platform that would allow Albertsons shoppers to automatically replenish their electronic grocery carts with their regular items, a task that “goes far beyond traditional product subscription platforms” due to the complexity of product assortment, basket size, shopping frequency and other factors, according to the suit.

“Replenium’s level of automation has never been available on large baskets of goods, like those in a regular trip to the grocery store,” the complaint said. “Unlocking this functionality helps ensure that customers do not run out of the products they need while providing a recurring revenue stream to retailers.”

Replenium, which was founded in 2015 by former Amazon executive Tom Furphy, began working with Albertsons in October 2020 to develop the auto-replenishing platform, the suit said. The parties planned to launch the platform in select markets before rolling it out nationwide across the chain’s more than 2,000 stores, with Replenium to receive service fees based on sales generated in the platform, it said.

Over three years, however, Albertsons delayed the launch while “repeatedly encouraging Replenium to continue its work… despite Albertsons’ missed deadlines, countless delays, and millions in expenses incurred by Replenium,” it said. Operating under a mutual nondisclosure agreement, the developers continued to share trade secrets with Albertsons while refining the platform and performing limited-market launches in California, expecting they would recoup their losses once the service launched nationally.

On Oct. 3, 2023, however, Albertsons abruptly terminated their partnership agreement, the suit said. The grocer “almost immediately” launched its own, nearly identical platform “that it had built with unfettered access to and use of Replenium’s trade secret and confidential information.”

“This termination came as a shock to Replenium,” the suit said, since, up until the day before, the two sides had been working toward a planned release of the project.

While Albertsons executives cited their pending merger with Kroger as a reason for the termination, Replenium said the promise of additional service-fee revenues that would come from the merger had been “dangled in front of Replenium as a reason to continue its investment.”

Kroger’s acquisition of Albertsons is the subject of a pending Federal Trade Commission lawsuit seeking to block the merger.

Soon after terminating the agreement with Replenium, the suit said, Albertsons rolled out its competing platform, “Schedule & Save,” to most of its large banners, such as Safeway, Vons, Albertsons and Jewel-Osco “without paying for Replenium’s technology and know-how.”

“As a result, Replenium, after investing over $10 million over three years of implementation and operation … lost nearly the entirety of that investment on the eve of the planned, full-scale expansion, without realizing any of its service fee revenue,” it said.

Albertsons declined to comment Tuesday on the case. Counsel for the company has yet to appear.

A spokesperson for Replenium said Tuesday that the company declined to comment.

In seeking a jury trial, Replenium asks that Albertsons be found to have violated U.S. and Washington state trade secrets acts, breached agreements for confidentiality and work, gained unjust enrichment and broke the implied covenant of good faith and fair dealing.

It asks for a monetary judgment to be determined at trial, as well as exemplary double damages.