Safeway Inc.

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Safeway Inc.
TypePublic
Traded asNYSESWY
S&P 500 Component
IndustryRetailing
FoundedAmerican Falls, Idaho, U.S. (1915)
HeadquartersPleasanton, California, U.S.
Number of locations1,678 (among all nameplates)
Key peopleSteven Burd
(CEO and Chairman)
ProductsBakery, dairy, delicatessen, dry cleaning, frozen foods, fuel, grocery, lottery, pharmacy, photographic processing, produce, seafood, snack food, liquor, flowers, and Western Union
ServicesSupermarket
RevenueIncrease US$ 43.63 billion (2011)[1]
Operating incomeIncrease US$ 1.134 billion (2011)[1]
Net incomeIncrease US$ 516 million (2011)[1]
Total assetsIncrease US$ 15.07 billion (2011)[1]
Total equityIncrease US$ 3.683 billion (2011)[1]
Employees178,000 (2012)[1]
WebsiteSafeway.com
Safeway.ca
 
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Safeway Inc.
TypePublic
Traded asNYSESWY
S&P 500 Component
IndustryRetailing
FoundedAmerican Falls, Idaho, U.S. (1915)
HeadquartersPleasanton, California, U.S.
Number of locations1,678 (among all nameplates)
Key peopleSteven Burd
(CEO and Chairman)
ProductsBakery, dairy, delicatessen, dry cleaning, frozen foods, fuel, grocery, lottery, pharmacy, photographic processing, produce, seafood, snack food, liquor, flowers, and Western Union
ServicesSupermarket
RevenueIncrease US$ 43.63 billion (2011)[1]
Operating incomeIncrease US$ 1.134 billion (2011)[1]
Net incomeIncrease US$ 516 million (2011)[1]
Total assetsIncrease US$ 15.07 billion (2011)[1]
Total equityIncrease US$ 3.683 billion (2011)[1]
Employees178,000 (2012)[1]
WebsiteSafeway.com
Safeway.ca

Safeway Inc. (NYSESWY), an American Fortune 500 company, is the second largest supermarket chain in North America, after The Kroger Co.,[2] and has 1,678 stores located throughout the western and central United States, northwestern Mexico and western Canada as of December 2011.[3] It also operates some stores in the Mid-Atlantic region of the Eastern Seaboard. The company is headquartered in Pleasanton, California. Supermarket News ranked Safeway No. 4 in the 2011 "Top 75 North American Food Retailers" based on 2010 fiscal year estimated sales of $41 billion.[2] Based on 2009 revenue, Safeway is the 11th largest retailer in the United States.[4]

Contents

History [edit]

Sam Seelig Stores [edit]

Sam Seelig Company was founded in April 1912 by Sam Seelig, who had come to California from Arizona in 1911. Seelig opened a single grocery store in Los Angeles at the corner of Pico and Figueroa streets.[5] The chain had grown to 71 stores by 1922.[6] After World War I, the firm became deeply indebted to its main grocery wholesaler, a firm owned by W.R.H. Weldon. In a swap of stock for debt, Weldon assumed control of the chain, leaving Seelig in charge of retail operations. Seelig then left the company in 1924 to enter the real estate business, eventually forming Sam Seelig Realty.

Safeway name [edit]

As a result of Seelig's departure, the company held a contest in 1925 to develop a new name, the result of which was Safeway. The original slogan was "an admonition and an invitation" to "Drive the Safeway; Buy the Safeway."[7] The point of the name was that the grocery operated on a cash-and-carry basis; it did not offer credit, as had been traditional for grocers. It was the "safe way" to buy because a family could not get into debt via its grocery bill (as many families did, especially during the Great Depression). By 1926, Safeway Stores had 322 stores centered in Southern California. Weldon saw himself as a wholesaler, and sold his 80% of the business for $3.5 million to Merrill Lynch in deal brokered by Charles E. Merrill.

Skaggs Stores [edit]

Skaggs Stores (see Skaggs Companies) had its start in 1915, when Marion Barton Skaggs purchased his father's 576-square-foot (53.5 m2) grocery store in American Falls, Idaho, for $1,089. The chain, which operated as two separate businesses, Skaggs' Cash Stores and Skaggs United Stores, grew quickly, and Skaggs enlisted the help of his five brothers to help grow the network of stores, which reached 191 by 1920.

Seelig and Skaggs merger [edit]

Charlie Merrill recognized the potential to consolidate the West Coast grocery industry. In June 1926, Merrill offered Skaggs either $7 million outright or $1.5 million plus 30,000 shares in the merged firm. Skaggs took the latter.[8] On July 1, 1926, Safeway merged with the 673 stores from Skaggs United Stores of Idaho and Skaggs Cash Stores of California. On completion of the Skaggs/Safeway merger, M. B. Skaggs became the Chief Executive of the business.[9]

The merger immediately created the largest chain of grocery stores west of the Mississippi.[10] Charles E. Merrill later left Merrill Lynch, for a period of time, to assist in the management of Safeway during the 1930s. At the time of the merger, the company was headquartered in Reno, Nevada, but in 1929, Safeway relocated its headquarters to a former grocery warehouse in Oakland, California. Safeway headquarters moved into Emil Hegstrom's Mutual Creamery Building on East 14th Street and remained there until the move to Pleasanton, California.

Although Seelig/Safeway is technically the original company, Safeway has always considered M. B. Skaggs as its founder and the American Falls, Idaho store the original store.[11]

Expansion [edit]

The initial public offering price of Safeway stock was $226 in 1927; a five for one split in 1928 brought the price down to under $50.

Over the next few years, Charles Merrill, with financing supplied by Merrill Lynch, then began aggressively acquiring numerous regional grocery store chains for Safeway in a rollup strategy. Early acquisitions included significant parts of Piggly Wiggly chain as part of the breakup of that company by Merrill Lynch and Wall Street.

YearFirm# of storesLocation
1926H.G. Chaffeegrocery storesSouthern California
1926Skaggs Cash Stores679 grocery storesIdaho
1926Skaggs United Stores(in above)California
1928Arizona Grocery/Pay'n Takit Stores24 grocery stores; 24 meat marketsArizona
1928Newway Stores15 grocery stores; 11 meat marketsEl Paso, Texas
1928Sanitary Grocery (incl. some Piggly Wiggly)429 grocery stores; 67 meat marketsWashington D.C. and Virginia
1928Eastern Stores Inc.67 grocery stores; 127 meat marketsBaltimore, Maryland
1928Piggly Wiggly Pacific91 grocery stores; 84 meat marketsOakland, California
1928Bird Grocery Stores (including some Piggly Wiggly)224 grocery stores; 210 meat marketsMissouri, Texas, Arkansas, Iowa, Kansas, Nebraska
1929Piggly Wiggly West91 grocery stores; 84 meat marketsNorthern California, Hawaii, Colorado
1929Sun Grocery91 grocery stores; 84 meat marketsTulsa, Oklahoma
1931MacMarr Storesgrocery storesLos Angeles
1936Stores from Kroger53 grocery storesOklahoma
1941Daniel Reeves498 grocery storesNew York
1941National Grocery84 grocery storesNew Jersey
1958Thriftway Stores (Iowa)30 grocery storesIowa

Most transactions involved the swap of stock certificates, with little cash changing hands. Most acquired chains retained their own names until the mid-1930s.

Safeway store number by state in 1932

In 1929, there were rumors of a Safeway-Kroger merger.[12]

The number of stores peaked at 3,400 in 1932, when expansion ground to a halt. The Great Depression had finally impacted the chain, which began to focus on cost control. In addition, the numerous smaller grocery stores began being replaced with larger supermarket stores. By 1933, the chain ranked second in the grocery industry behind The Great Atlantic & Pacific Tea Company and ahead of Kroger.

In 1935, Safeway sold its nine stores in Honolulu, Hawaii "because of the inconvenience of proper supervision."[13] Also in 1935, independent grocery in California convinced the California legislature to enact a progressive tax on chain stores. Before the act took effect, Safeway filed a petition to have the law put to a referendum. In 1936, the California electorate voted to repeal the law.

In 1936, Safeway introduced a money back guarantee on meat.[14]

Change in number of Safeway stores from 1925 to 1960
CountryYear# of stores
United Kingdom1962131 (1986)
Australia1962123 (1984)
West Germany196335 (1984)
Mexico1981137 (2007)
Saudi Arabia19826 (1984)
Jordan20036 (2009)
Kuwait ? ?

The company expanded into Canada in 1929 (which became Canada Safeway Limited); into the United Kingdom in 1962 (which became Safeway plc); into Australia in 1963 (which became Safeway Australia); and into Germany in 1964. The company also has operations in Saudi Arabia and Kuwait in a licensing and management agreement with the Tamimi Group during the 1980s. In 1981, it acquired 49% of Mexican retailer Casa Ley.

International expansion was achieved through the acquisition of one or more small chains, except in the case of Saudi Arabia and Kuwait, which was through a joint venture. This initial nucleus of stores received Safeway systems and technology and then expanded organically. International chains acquired include:

YearFirm# of storesLocation
1929 ?9 grocery storesCanada
1935Piggly Wiggly (Canada)179 storesCanada
1962John Gardner Limited11 storesUnited Kingdom
1963Pratt Supermarkets3 storesMelbourne, Australia
1963Mutual Stores ? storesAustralia
1964Big Bär Basar (Big Bear Bazaar)2 storesWest Germany
1980Jack the Slasher31 storesQueensland, Australia
198149% of Casa Ley ? storesMexico

1940s-1970s [edit]

Safeway Stores 1955 Specimen Stock Certificate
A Marina Safeway in Hamilton, Montana built in 1962
An older store design from the 1970s and 1980s is seen in this San Jose, California Safeway.

In 1941, Marion B. Skaggs retired from the Safeway board of directors.[9]

In 1947, the company's sales exceeded $1 billion for the first time. By 1951, total sales had reached nearly $1.5 billion. The company adopted the S logo in 1962, which it still uses.

In 1955, Robert A. Magowan became Chairman of the Board of Safeway. Magowan had married Charles Merrill's daughter, Doris. Magowan also assumed the title of President in 1956. He remained President until 1968, and a member of the board until 1978.

In 1959, Safeway opened its first store in the new state of Alaska, being the first major food retailer to enter the market. The company opened three stores in Anchorage and one in Fairbanks over the next several years. The store in downtown Fairbanks was built on the site of a red-light district, known as "The Line," which operated for close to a half century. Most of these stores were located in buildings constructed by Anchorage real estate developer Wally Hickel, who later became governor of Alaska and U.S. Secretary of the Interior.

Also in 1959, the firm also opened the first "Marina"-style store on the Marina in San Francisco. Numerous stores were opened in this style throughout the next decade.[15]

The company's New York operations were sold in 1961 to Finast.[16]

In 1963, Safeway again opened stores in Hawaii, having exited this market in 1934.[17]

In 1969, Safeway entered the Toronto market in Canada and the Houston market in Texas by organic opening of new stores, rather than by acquisition. The firm would ultimately fail in both these markets against entrenched competition.

In 1977, Safeway management instituted a program to fight the use of counterfeit $100 bills, by, among other things, telling employees that bills that lacked the words "In God We Trust" were counterfeit. Because Safeway had not sufficiently investigated the history of those words, it was unaware there were still a few bills without the phrase in circulation. Eventually, a hapless shopper was incorrectly reported to Oakland, California police as being a counterfeiter; he was arrested and strip-searched before Oakland police contacted the Treasury Department and realized the error. The 1981 jury verdict of joint and several liability for $45,000 against Safeway Stores and the City of Oakland was upheld in full by the Supreme Court of California on December 26, 1986.[18]

In 1979, Peter Magowan, son of Robert Magowan and grandson of Charles Merrill, was appointed Chairman and CEO of Safeway. Magowan would manage Safeway for the next 13 years - presiding over the dramatic decline of the firm in terms of store numbers

1980s: Takeover and sell-offs [edit]

Following a hostile takeover bid from corporate raiders Herbert and Robert Haft, the chain was acquired by Kohlberg Kravis Roberts (KKR) acting as a white knight in 1986. With the assistance of KKR, the company was taken private and assumed tremendous debt. To pay off this debt, the company began selling off a large number of its operating divisions.

YearDivision sold# of storesSale priceBuyerOutcome
1983Omaha/Sioux Falls64 storesn/aMultiple buyers including Hy-Vee & FarewayStores continue to operate as Hy-Vee (Omaha/Lincoln/Sioux Falls) and Fareway (Sioux City, IA)
1985Southern Ontario22 storesn/aOshawa GroupOshawa acquired by Sobeys in 1998
1985West Germany36 storesn/aMeierei C Bolle[19]Stores now part of Edeka
1987Dallas141 storesn/aUnable to sell whole divisionSold in pieces to Kroger, Brookshire's, Tom Thumb Food & Pharmacy (which is now owned by Safeway), Minyard Food Stores and Furr's; some stores shuttered
1987Salt Lake City60 stores$75mBorman's (Detroit)Borman's sells stores in pieces at under book value in 1988 to Flemings (supermarkets) & Albertsons; Borman's acquired by A&P late 1988
1987El Paso59 stores$140mFurr's Supermarkets (see Roy Furr)Firm hits financial difficulties; MBO of some stores; other sold; bankruptcy in 2001
1987Oklahoma106 storesn/aMBO by management and Clayton & Dubilier forming Homeland (supermarket)Firm listed then goes into bankruptcy in 1996. Later it was bought by and became a subsidiary of Associated Wholesale Grocers.
1987Safeway UK121 storesUS$1bArgyll FoodsStores continued to trade under Safeway name until 2005, when they were acquired by Morrisons
1988Kansas City66 storesn/aMorgan Lewis Githens & Ahn/W S Acquisition Corp.Renamed Food Barn; bankruptcy 1994; stores sold to Associated Wholesale Grocers, which either closed or divested them to their members.
1988Little Rock51 storesn/aAcadia PartnersRenamed Harvest Foods; bankruptcy in 1995; stores sold off; some now part of Associated Wholesale Grocers after the demise of Affiliated Foods Southwest
1988Houston99 stores$174.6mMBO with Duncan Cook and Co. and the Sterling GroupRenamed AppleTree; bankruptcy 1992; stores sold to competitors
1987Safeway Australia135 stores$124mWoolworths Limited AustraliaSome stores continue to trade under Safeway name.
1988Southern California172 stores$408mVonsSafeway takes 30% share in Vons; later acquires 100%

The divested domestic divisions of Safeway proved to be poisoned chalices for almost all those who acquired them. Essentially every purchasing entity hit financial troubles and either went bankrupt or was later acquired. (Hy-Vee and Fareway are the exceptions with the locations they acquired, having made them work)

The international stores were more successful for their acquirers. UK stores, Safeway plc, were sold to Argyll Foods, which itself was ultimately absorbed by Morrisons in 2004. Safeway Australia was sold to the Australian-based Woolworths Limited in 1985.

In Southern California, Safeway sold its stores to Vons in exchange for a 30% interest in the company, pulling completely out of established markets like Los Angeles and San Diego, and diminishing operations in Fresno, Modesto, Stockton, and Sacramento. Save Mart Supermarkets purchased the few remaining Fresno Safeway stores in 1996.

Safeway's national presence was now reduced to several western states and Northern California, plus the Washington, D.C. area. Altogether, nearly half the 2,200 stores in the chain were sold.

Canada Safeway dominated the grocery store landscape in Western Canada in the 1970s and 1980s. For example, the company controlled 80 percent of the grocery market in Alberta in the 1970s. The government even accused Safeway of having a monopoly on the grocery store business, causing unnecessarily high food prices. A judicial inquiry restricted the number of stores Safeway could open, and forced the company to close or sell off some locations to competitors like IGA. Incidentally, while some IGA stores housed in old Safeways have operated successfully for decades, others ceased operation in recent years.

In October 1986, the Canadian Press reported Safeway Canada took an $8 million hit by closing a prime store at West Edmonton Mall, which was the world's largest shopping centre at that time. It was the fifth store Safeway had closed in west Edmonton.[20] Among those former stores, one included the location at the former Centennial Village Mall, now Mayfield Common (the building sat vacant for years, before briefly housing Edmonton's first, but temporary Save-On-Foods in the early 1990s, as a much larger, permanent Save-On-Foods was being built up the parking lot; another former Safeway location in west Edmonton now houses a Rexall Pharmacy.

Safeway also opened other grocery stores under the Food Barn and Food for Less names in Alberta; and the Safeway Superstore name in British Columbia. Food Barn was similar to Safeway in terms of selection and prices, but the store itself resembled a warehouse the size of an average Safeway store. In the mid-1980s, Food for Less was launched in the Alberta cities of Edmonton and Calgary, as a big-box, discount food store chain meant to compete with Loblaws's Real Canadian Superstore, which had expanded to western Canada. Most Food for Less and Real Canadian Superstore locations were constructed within blocks of each other. Upon the Real Canadian Superstore's opening, Loblaws produced television commercials with an aggressive tone, taking direct aim at Safeway's higher prices. One ad featured a man holding a rolled up Safeway newspaper flyer, while promising viewers they would find lower prices at the Real Canadian Superstore. While prices at Food for Less were meant to compete with the Real Canadian Superstore's, and be lower than that of Safeway's, this wasn't always the case.

In late 1987, Safeway acquired the 26 Woodward's Food Floors, which operated in the western Canadian provinces of British Columbia (16 stores) and Alberta (10). These stores were later rebranded as Woodward's World of Food.

Safeway would close Food Barn or rebrand stores as Safeway before the decade was over.

The company was taken public again in 1990.

1990s and beyond [edit]

Safeway in 1663 Branham Lane, San Jose, CA 95118

In the late 1990s, Safeway began to again aggressively acquire regional chains, including Randall's Food Markets in Texas, Carrs in Alaska, and Dominick's in Illinois. In 1997, it exercised its option to acquire control of Vons in Southern California. (The buyout of Randall's marked Safeway's return to Texas ten years after the original stores in Houston were sold to AppleTree.)

In western Canada, shortly before the Woodward's retail chain was sold off to the Hudson's Bay Company, and then closed by HBC in 1993, Safeway rebranded Woodward's Food Floors and World of Food stores to Safeway stores, though the interior of some locations kept the World of Food decor for several years, before being renovated into full-fledged Safeways. The Woodward's brand name effectively vanished from the Canadian retail landscape as a result.

Canada Safeway had gained a notorious reputation for its high prices. To combat this, and losing its market share to competitors such as the Real Canadian Superstore, Safeway staged a successful publicity stunt that saw all of its stores closing for one day. They would reopen Wednesday, February 17, 1993 with Safeway loudly proclaiming its new commitment to having the lowest food prices. A new marketing campaign took off, featuring the motif of large red arrows pointing downwards. Safeway took out full-page ads in newspapers, listing hundreds of products and their new, drastically lower prices. Television commercials started airing, featuring helicopters flying across communities, carrying the red arrows before releasing and dropping them into a Safeway parking lot. The ads actually starting airing a couple of weeks earlier, but they were shrouded with much more mystery and secrecy. The first batch of commercials made no reference to Safeway; they only consisted of dark shots of many helicopters flying around - almost resembling a war zone. There was no voice either - only the sound of flying helicopters. The commercials ended with a text message on the screen informing viewers that something big was happening soon.

Safeway's new commitment to lower prices ignited a price war between grocery stores, much to the delight of consumers, that lasted for several weeks. However, Safeway's prices slowly crept back up as months passed, and within a couple of years, the red arrow campaign was abandoned altogether, and once again, Safeway regained its reputation for high prices.

Safeway was also experiencing labor pains with its employees in Edmonton in the mid-1990s. The company even threatened to shut down its stores if it could not work out a deal with the union. Rival the Real Canadian Superstore even took out a full-page newspaper ad, offering to buy out Safeway if there was indeed such trouble. No deals were ever made between any of the parties. Eventually, Safeway workers walked off the job. The weeks-long strike had many Safeway customers shopping elsewhere, so they would not have to cross the picket line.

By the mid to late-1990s, Safeway would close or convert existing Food for Less stores in Alberta to Safeways. As the Food for Less stores were much larger than regular Safeways, the company either vacated the Food for Less location and moved to a new building blocks away; or shrunk the store as it was renovated into a Safeway and leased off the extra space to another retailer. In British Columbia, Safeway Superstores eventually just became Safeways, therefore ending confusion between Safeway Superstores and the competing Loblaws-owned Real Canadian Superstore.

In the late 1990s, the company launched its popular Safeway Club Card loyalty program. The company said the card would make it more convenient for customers to get discounts, instead of clipping coupons. However, months after the Club Card's launch, the company would start reissuing coupons, which puzzled customers, some of whom already suspected Safeway only launched the Club Card for marketing and tracking purposes.

In 2001, Safeway acquired the family-owned Genuardi's chain, with locations in Pennsylvania, New Jersey, and Delaware. Safeway also created the subsidiary Blackhawk Network, a prepaid and payments network, a card-based financial solutions company, and a provider of third-party prepaid cards.

In October 2003, a strike was called by members of the United Food and Commercial Workers at Vons stores in Southern California. The strike (and concurrent lockout at Albertsons and Ralphs) lasted until the end of February 2004.

In November 2006, speculation rolled around as the Chicago Sun-Times reported that Sears Holdings Corporation may buy Safeway.[21]

In 1999, the Safeway chain started to also sell gasoline at some of its new stores.[22]

In 2012, its Genuardi's chain in suburban Philadelphia was dissolved through a combination of store selloffs and closures. Giant acquired 15 of the chain's stores and had made an offer for a 16th, but the latter was instead sold to a local chain as part of an antitrust settlement. Weis also bought three Genuardi's locations. A number of unprofitable Genuardi's units also had closed in 2010 and 2011 as their leases expired. Earlier, Zagara's, a small chain of upscale, gourmet supermarkets started by Genuardi's in 1990 was also shuttered in 2000, immediately following their parent company's acquisition by Safeway. The only Genuardi's in the northern half of New Jersey was also closed soon after the merger with Safeway, and a location in Bensalem, Pennsylvania was sold to ShopRite in 2004. Genuardi's in Wilmington, Delaware were converted to the Safeway name in 2004 due to legal issues stemming from a union contract signed by the management of early Safeway stores in Delaware which closed in 1982. The current Safeway locations in Delaware are served by division offices in the Baltimore-Washington metropolitan area, where Safeway has long been the dominant grocer; however, the majority of Safeway stores operate in the Western United States, where the chain originated. The next closest remaining Safeway-owned stores to the Baltimore-Washington division are Dominick's stores in Illinois.

Locations [edit]

Safeway has a total of 1,501 stores in the United States and 224 stores in Canada, over 80% of which are located in western states and provinces. The greatest concentration of Safeway branches is in California, with 557 stores (including the 285 branded as Vons), followed by Washington with 204 stores and Colorado with 141. In Canada, the greatest number of Safeway locations is in Alberta, with 96 stores and British Columbia with 75 stores.[23]

Safeway store sign in Lakeview, Oregon.

Chains [edit]

Private brands [edit]

"Safeway Select" is the company's signature private label that offers an upscale range of products, a sublabel "Primo Taglio" is used for more upscale deli products and "Lucerne" is the main dairy line. In 2006, Safeway introduced a new line, with organically grown and processed line of products named "O Organics". In late 2007, the Safeway Select: Signature line was renamed Signature Cafe.

Some of the brands in use are:

  • Basic Red/Value Red — Mostly paper products, but includes large tubs of ice cream and sandwich breads and buns.[24]
  • Bright Green — Environmentally friendly cleaning products[25]
  • Butcher's Cut, The — Secondary meat brand used for prepackaged cold cuts and raw meats
  • Captains Choice — Seafood brand
  • Country Hearth - A Lucerne manufactured line of bread similar to Oroweat
  • Conti Gourmet Coffee. A gourmet goffee company, base Coppell, Texas
  • Dairy Glen — A second dairy brand, it is also used for the two gallon tubs of ice cream.
  • Deli Counter, The — A secondary deli brand used mainly for cold cuts
  • Diablo Creek — Wine
  • Eating Right — Brand used for healthier eating using labels such as low fat, low sodium, etc.
  • Firefly Ridge — Wine
  • Gourmet Meat Shoppe — Frozen meat products
  • In Kind — Hygiene products, beginning October 2010
  • Jerseymaid — A carryover dairy brand from Safeway's acquisition of Vons, still used due to its reputation
  • Lucerne — The main dairy brand, used for ice cream, cheese, yogurt, and milk[24]
  • Manor House — Another frozen meat line used for turkeys during the holidays
  • Mom to Mom — A full line of baby products[26]
  • O Organics — Line of organic products
  • Open Nature — A line of 100% natural foods, beginning January 2011
  • Oven Joy — Bread brand that is neither Safeway, O Organics, Eating Right nor Safeway Select
  • Pantry Essentials — Line of affordable food and household items
  • Primo Taglio — The upscale deli cold cut brand[24]
  • Priority — Pet care brand.[24]
  • Produce Stand, The — Prepackaged produce such as baby carrots, salads, and raisins
  • Ranchers Reserve — The upscale meat brand.[24]
  • Refreshe — Originally reserved for bottled water, now (as of summer 2010) includes all flavors of soda that were previously branded as standalone or "Safeway" products
  • Remarkable — Used for the Texas based stores
  • Safeway — This includes nonbranded items that have unique names, and are not a whole brand to themselves, also used on items that just have descriptive titles instead of names[24]
  • Safeway Select — These are mostly the upscale items.[24]
  • Safeway Kitchens
  • Signature Cafe — Deli line of soups, side dishes and prepared salads[27]
  • waterfront BISTRO — Frozen seafood products[28]

(Refreshe Brand Cola is produced by Cotts Beverages for Safeway Inc.; it is bottled in San Bernardino, California. Safeway Refreshe brand bottled water is bottled by Advanced H20, LLC in Stockton, California. Safeway closed its water bottling plant in downtown Los Angeles in January 2012.

Lifestyle Branding [edit]

Safeway "Lifestyle" look produce department
Safeway "Lifestyle" look front end checkouts

On April 18, 2005, Safeway began a $100 million brand repositioning campaign labeled "Ingredients for life." This was done in an attempt to differentiate itself from its competitors, and to increase brand involvement. Steve Burd described it as "branding the shopping experience".[29]

The launch included a redesigned logo, a new slogan "Ingredients for life" alongside a four-panel life icon to be used throughout stores and advertising, and a web application called "FoodFlex" to improve consumer nutrition. Many locations are being converted to the "Lifestyle" format. The new look was designed by Michigan-based PPC Design. In addition to the "inviting decor with warm ambiance and subdued lighting", the move required heavy redesign of store layout, new employee uniforms, sushi and olive bars, and the addition of in-store Starbucks kiosks (with cupholders on grocery carts). The change also involved differentiating the company from competitors with promotions based on the company's extensive loyalty card database. At the end of 2004, there were 142 "Lifestyle" format stores in the United States and Canada, with plans to open or remodel another 300 stores with this type of theme the following year. "Lifestyle" format stores have seen significantly higher average weekly sales than their other stores. By the end of 2006, shares were up, proving this rebranding campaign had a major impact on sale figures.

In 2007, the 1000th "Lifestyle" store was built in Everett, Washington.

Safeway Fuel [edit]

Safeway has fuel stations at some stores.[30] These stations allow customers to use a phone number or club (loyalty) card to receive fuel savings. In the US, the discount is 10¢/gal, with the purchase of $100 in groceries. In Canada, the discount is 5¢/L, with the purchase of $35 in groceries in a single transaction.

However, as of August 1, 2012, Safeway has announced they will discontinue their club card discount at the pump, which is currently 3¢ per gallon. Customers can continue to accumulate points by using their club cards (or phone numbers linked to their cards) on purchases to earn up to $1 off per gallon.

Past concepts [edit]

A Safeway in Sherwood Park, Alberta, Canada, 1961

Safeway has tried a range of new store formats over the years, most of which have ultimately failed.

In 1963, Safeway developed the Super S format, a general merchandise and drug store opened adjoining a new Safeway supermarket. The stores would share a common entrance, but were operated as separate businesses with their own checkstands. The first outlet was opened in Anchorage, Alaska. In 1965, 22 existing Super S stores were divested to Skaggs Drug Stores. Safeway divested the remaining stores in 1971.[31]

In 1964, Safeway opened a trial two-level International Store at 12th and F Street in Washington, D.C., with a conventional Safeway downstairs and a gourmet store on the upper floor. The Safeway International Store range included wild boar steaks, snow hare, suckling pig, and reindeer steaks.[32]

The company also made a number of attempts to repurpose older, smaller store sites, opening Food Barn, a discount grocery outlet, and Liquor Barn, a discount liquor outlet, in the 1970s. Safeway also trialled Town House in Washington, D.C., small stores targeting apartment dwellers, and a gourmet store concept, Bon Appetit in San Francisco and Tiburon, California.

In 1969, Safeway formed a joint venture with Holly Farms Poultry Industries (now part of Tyson Foods) to open Holly Farms Fried Chicken in an effort to diversify into fast food restaurants and compete with KFC. The first store opened in Colonial Heights, Virginia in August, 1969.[33]

In western Canada in the 1980s, Safeway would open Food Barn, a store format inherited with the purchase of the Jack the Slasher chain in Australia. The store was similar to Safeway in terms of selection and prices, but the store itself resembled a warehouse. These stores would later close or be rebranded as Safeways before the decade ended.

Also in the 1980s, Safeway also tried entering the discount, big-box food store business with Food for Less in Alberta and Safeway Superstore in British Columbia. These stores would later close or convert into regular Safeways in the mid to late 1990s. Safeway also acquired Pak 'n Save Foods, a box warehouse concept, as part of the purchase of Brentwood in Northern California.

Safeway ATM Network [edit]

The Safeway ATM Network is operated in Colorado, Oregon, Wyoming and Washington. There is typically one machine located near the front of each store. Cirrus, Plus, Star, and NYCE are on the network. The network was started in late 1998 in Denver and was expanded to Wyoming, Washington, and Oregon; it is operated by Cardtronics for Safeway.

Support Offices [edit]

Corporate governance [edit]

Safeway headquarters in Pleasanton, California

Current members of the board of directors of the company are: Steven Burd, Janet Grove, Mohan Gyani, Paul Hazen, Robert MacDonnell, Douglas Mackenzie, Rebecca Stirn, William Tauscher, and Raymond Viault.[34]

Logos [edit]

Slogans [edit]

An early 21st century Safeway store in Sunnyvale, California
A Safeway.com delivery truck, used for deliveries to people who buy their groceries online

SCOP: Safeway Category Optimization Process [edit]

Safeway recently transitioned from regional control of their product assortments to national category management, known as the Safeway Category Optimization Process (SCOP). With all dry grocery corporate buying done from Safeway's Pleasanton offices, it is said it will increase representation of manufacturers by experienced sales professionals with extensive product and category knowledge. Corporate produce buying offices are located in Phoenix, Arizona. This will mean consistency across the Safeway chain, meaning one could go into a store in Winnipeg or San Francisco and find the same products at the same price, as all negotiation is now done at the corporate level.

Animal Welfare Concerns [edit]

In 2012, Mercy for Animals conducted an undercover investigation at Christensen Farms, a pork supplier to Safeway, Walmart, Costco, Kroger, and Kmart.[35] Before the public release of Mercy For Animals' investigation at Christensen Farms, Safeway announced they would begin requiring their pork suppliers to phase out gestation crates.[36][37]

Safeway Music [edit]

Safeway music is provided by InStore Broadcasting Network. The satellite network also beams commercials and advertisements for Safeway products and brands that play intermittently with the music.

Healthy Measures Employee Insurance Plan [edit]

Safeway has designed an innovative, market-based employee health insurance plan that has kept per capita health-care costs flat between 2005 and 2009 (including both the employee and the employer portion), while most American companies' costs have increased 38% over the same four years.

The Safeway Healthy Measures plan capitalizes on two key insights. The first is 70% of all health-care costs are the direct result of behavior. The second insight is 74% of all costs are confined to four chronic conditions: cardiovascular disease, cancer, diabetes and obesity. Furthermore, 80% of cardiovascular disease and diabetes is preventable, 60% of cancers are preventable, and more than 90% of obesity is preventable. Safeway's insurance program focuses on tobacco usage, healthy weight, blood pressure and cholesterol levels, using a provision in the 1996 Health Insurance Portability and Accountability Act that permits employers to differentiate premiums based on behaviors.

Safeway's Healthy Measures program is completely voluntary and currently covers 74% of the insured nonunion work force. Employees are tested for the four measures cited above and receive premium discounts off a "base level" premium for each test they pass. Data are collected by outside parties and not shared with company management. If they pass all four tests, annual premiums are reduced $780 for individuals and $1,560 for families. Should they fail any or all tests, they can be tested again in 12 months. If they pass or have made appropriate progress on something like obesity, the company provides a refund equal to the premium differences established at the beginning of the plan year.[38]

See also [edit]

References [edit]

  1. ^ a b c d e f "2011 Form 10-K, Safeway Inc.". Safeway Inc. Invester. 
  2. ^ a b "SN's Top 75 Retailers for 2011". Super Market News. Super Market News. 2010-12-01. Archived from the original on 2013-04-01. 
  3. ^ Safeway Factbook 2012
  4. ^ Top 100 Retailers, Stores, July 2010.
  5. ^ Site is now the location of the Los Angeles Convention Center http://maps.google.com/maps?f=q&hl=en&geocode=&q=Pico+and+Figueroa,+Los+Angeles
  6. ^ Los Angeles Times, January 26, 1922
  7. ^ Seelig's Chain is now Safeway, Los Angeles Times, March 15, 1925, pB8
  8. ^ Wall Street to main street; Charles Merrill and middle-class investors, p111
  9. ^ a b Safeway Annual Report 1966, p2
  10. ^ Safeway stock out tomorrow, Los Angeles Times, November 14, 1926, p17
  11. ^ Safeway Annual Report 1975, p2
  12. ^ Wall Street Journal, October 1, 1929
  13. ^ Wall Street Journal, January 28, 1935
  14. ^ Supermarket News, December 10, 2001
  15. ^ Safeway annual report 1959, p4
  16. ^ Safeway Annual Report 1961
  17. ^ Safeway Annual Report 1966, p10
  18. ^ Pool v. City of Oakland, 42 Cal. 3d 1051 (1986).
  19. ^ de:Meierei C. Bolle
  20. ^ Safeway negotiates to buy 26 stores from Woodward's, The Ottawa Citizen, December 12, 1986.
  21. ^ "Sears may have eye on Safeway". Chicago Sun-Times. November 9, 2006. Retrieved February 3, 2007. [dead link]
  22. ^ Safeway Gas Stations
  23. ^ Safeway Factbook 2010
  24. ^ a b c d e f g "Safeway Brands". safeway.com. Retrieved January 14, 2010. 
  25. ^ "Safeway Brands - Bright Green". safeway.com. Retrieved January 14, 2010. 
  26. ^ "Safeway Brands - Mom to Mom". safeway.com. Retrieved January 14, 2010. 
  27. ^ "Safeway Brands - Signature Cafe". safeway.com. Retrieved January 14, 2010. 
  28. ^ "Safeway Brands - Waterfront Bistro". safeway.com. Retrieved January 14, 2010. 
  29. ^ Safeway ready to unveil new 'branding' campaign, Supermarket News, March 2005.
  30. ^ "Safeway: Fuel Stations". Shop.safeway.com. Retrieved January 10, 2011. 
  31. ^ "Safeway's Super S Story". Pleasant Family Shopping. September 16, 2007. Retrieved January 10, 2011. 
  32. ^ Safeway Annual Report 1964
  33. ^ Safeway Annual Report 1969
  34. ^ Corporate Governance (PDF), Safeway, Inc. Last retrieved January 29, 2007.
  35. ^ "Walmart Cruelty: The Hidden Cost of Walmart's Pork". Mercy For Animals. Retrieved 4 September 2012. 
  36. ^ Runkle, Nathan. "Victory! Costco and Kmart Commit to Ditching Gestation Crates Following MFA Investigation". Mercy For Animals. Retrieved 4 September 2012. 
  37. ^ Runkle, Nathan. "Safeway Pledges to Eliminate Cruel Gestation Crates from Supply Chain". Mercy For Animals. Retrieved 2 September 2012. 
  38. ^ How Safeway Is Cutting Health-Care Costs, The Wall Street Journal, June 2009.

External links [edit]

Media related to Safeway stores at Wikimedia Commons