Safeway Inc.

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This article is about the U.S.-based Safeway, Inc. – For information on related companies also called "Safeway", see Safeway.

Safeway, Inc.
Type	Public
Founded	1915
Headquarters	Pleasanton, California
Key people	Steven Burd, CEO & Chairman
Industry	Retail (Grocery)
Products	Bakery, dairy, deli, frozen foods, general grocery, meat, pharmacy, produce, seafood, snacks, liquor
Revenue	38.4 billion USD (2005)
Employees	208,000
Website	www.safeway.com

Safeway Inc. (NYSE: SWY), a Fortune 500 company, is North America's second largest supermarket chain, with over 1800 stores located throughout the central and western United States and Canada. It also operates some stores in the Mid-Atlantic region of the Eastern Seaboard. The company is headquartered in Pleasanton, California.

Contents 1 History 1.1 Founding and merger 1.2 Expansion 1.3 1980s: Takeover and sell-offs 1.4 1990s and beyond 2 Corporate governance 3 Brands 3.1 Lifestyle branding 3.2 Safeway fuel 3.3 Safeway ATM Network 4 Banners 5 Logos 6 Slogans 7 Image gallery 8 References 9 External links

[edit] History

[edit] Founding and merger

The Safeway chain was created in a merger engineered by Merrill Lynch in 1926 of Skaggs Stores and Sam Seelig Company. The name "Safeway" was created at that time for the stores and group.

Skaggs Stores had its start in 1915, when Marion B. Skaggs purchased his father's grocery store in American Falls, Idaho for $1,089. The chain, which traded under the name Skaggs' Cash Stores grew quickly, and Skaggs enlisted the help of his five brothers to help grow the network of stores which reached 191 by 1920.

Sam Seelig Co. was founded in Los Angeles in the 1920s.

By the time of the merger in 1926, Seelig Stores had 322 stores centered in Southern California, while Skaggs had grown to 673 stores centered in the Pacific Northwest region. The merger was orchestrated by Charles Merrill of Merrill Lynch, who later left Merrill Lynch, for a period of time, to run Safeway in 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.

[edit] Expansion

Safeway, with financing supplied by Merrill Lynch, then began to aggressively acquire numerous regional grocery store chains, including MacMarr (a California chain also assembled by Charles Merrill), the Sanitary Grocery Company of Washington D.C., Daniel Reeves of New York, and Burd Stores of Kansas City. The company also acquired the west coast Piggly Wiggly stores in 1928 as part of the break up of that company by Wall Street. Most acquired chains retained their own names until the mid 1930s.

The number of stores peaked at 3,527 in 1931, when the numerous smaller grocery stores began being replaced with larger supermarket stores.

International expansion was an early part of the company's growth. The company expanded into Canada in 1929, into the United Kingdom in 1962, with the acquisition of the eleven store John Gardner Limited, into Australia in 1963, with the acquisition of three store Pratt Supermarkets, into Germany in 1964, with the acquisition of several Big Bear stores. The company also had operations in Saudi Arabia and Kuwait during the 1980s.

The company historically had drug store operations, under the Super S brand. However, these were sold in 1971.

[edit] 1980s: Takeover and sell-offs

Following a hostile takeover bid from corporate raiders Herbert and Robert Haft, the chain was acquired by 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 sold the West Germany and UK divisions (Safeway plc, which is now part of Morrisons), Dallas, Salt Lake City, El Paso, Oklahoma stores, and the Liquor Barn divisions in 1987, and the Kansas City, Little Rock, and Houston divisions in 1988. Safeway's national presence was reduced to Northern California and several western states, plus the Washington, D.C. area. Safeway Australia was sold to the Australian-based Woolworths Limited in 1985. Altogether, nearly half the 2,200 stores in the chain were sold.

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

The company was taken public again in 1990.

[edit] 1990s and beyond

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.

In 2001, Safeway acquired the family-owned Genuardi's chain, which had/has locations in Pennsylvania, New Jersey, and Delaware. This was a failure at first, with local shoppers not pleased with Safeway's changes.

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 January 2006, Dateline NBC conducted a grocery store investigation of ten of the largest grocery stores in the nation, and found Safeway to be the most hazardous grocery store, with 25 critical violations per each ten visits. The company reported to NBC that "Safeway has 'continued to enhance and re-energize store adherence to our food safety and sanitation standards.'"

In November 2006, speculation rolled around as The Chicago Sun Times reported that Sears may buy Safeway, Home Depot, Gap and Anheuser-Busch.^[1]

[edit] Corporate governance

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

[edit] Brands

The company's most notable private label brands from the past are Lucerne and Empress. Today, Safeway Select is the company's signature private label that offers an upscale range of products, a sub-label Primo Taglio is used for deli products and Lucerne still used as a dairy line. In 2006, Safeway introduced an organically grown and processed line of products named "O Organics".

Under the new (as of 2006) company branding structure, the Safeway Select has become a label used for only specific luxury items, while a more standard Safeway label (using the Ribbon Leaf logo) for more general-usage and standard items.

[edit] Lifestyle branding

On April 18, 2005, Safeway began a 100 million dollar brand re-positioning campaign labeled "Ingredients for life".[1] 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".[2] The launch included a redesigned logo, the slogan "Ingredients for life" and a four-panel "life" icon" to be used throughout stores and advertising. Many stores are being converted to "lifestyle format" stores. In addition to the "inviting decor with warm ambiance and subdued lighting,"[3] 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. [4] 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.[5]

[edit] Safeway fuel

Safeway has recently added Safeway fuel stations to some stores, along with a club card discount. Stores are required to monitor gas prices of competitors and lower theirs accordingly. Most participating Safeway stores sell fuel to consumers for less than their purchase price, but raise the price of select products to make up for the loss. Stores offer a six, seven, 10 or 11 cent discount on purchases over $50, encouraging consumers to buy more products with an already-increased price. Products typically not included range from alcohol, tobacco, pharmaceuticals, lottery tickets, and those purchased with gift cards.

[edit] Safeway ATM Network

The Safeway ATM Network is operated in Colorado and Wyoming. There are typically two machines located near the front of each store. Cirrus, Plus, Star, Nyce, Co-Op and most credit unions are on the network. The network was started in late 1998 in Denver and was expanded to Wyoming.

[edit] Banners

In addition to the Safeway name, the company also operates stores under the following banners:

• Carrs (Carr-Gottstein Foods), Alaskan supermarket chain
• Casa Ley, food stores in western Mexico
• Dominick's (Dominick's Finer Foods), Illinois supermarket chain
• Genuardi's (Genuardi's Family Markets), Mid-Atlantic supermarket chain
• Pak 'n' Save (price impact chain in California)
• Pavilions, upscale division of The Vons Companies, Inc.
• Randall's Food Markets, southeast and central Texas supermarket chain
• Tom Thumb Food & Pharmacy, northern Texas supermarket chain
• Vons (The Vons Companies, Inc.), Southern California/Nevada supermarket chain

[edit] Logos

• The S Medallion (1946–December 1981) - The red "S" part (probably modeled after the Chinese yin-yang symbol) was slightly thinned in late 1957, and would remain in this fashion through 1981.
• The Ribbon Leaf (January 1982–2005) - Safeway used this logo from January 1982 to April 17, 2005. The red stylized "S" was still located in the center.

[edit] Slogans

• Since We're Neighbors, Let's Be Friends (1974–1979) - Probably the first Safeway advertising campaign to make use of a singalong jingle. This slogan was used by the U.S. stores until July 16, 1979, when the "Everything" slogan was adopted.
• Today at Safeway (used by the Canadian stores during the same period as the American jingle listed above)
• Everything You Want from a Store and a Little Bit More (1979–December 1981) - This campaign, launched on July 16, 1979, was adopted, perhaps, to reflect the image of Safeway stores as "one stop shopping centers." This campaign was used through December 1981, although it was in use in the UK into the 1990s.
• Today's Safeway: Where You Get a Little Bit More (January 1982–1983) - The first Safeway ad campaign to make use of the company's new "ribbon leaf" logo.
• America's Favorite Food Store (1983–1989)
• I Work an Honest Day and I Want an Honest Deal (sometime in the 80's)
• Nobody Does It Better (1989–1992) - This campaign is unique for being adapted from a pop song. In this case, the song was originally a hit for Carly Simon in 1977. Simon originally sang it as the theme song to 1977's James Bond movie, The Spy Who Loved Me.
• We Bring It All Together (late 1980s-early 1990s) Main slogan for Safeway locations in Canada.
• Giving Our Best (1993–2005)
• Vons is Value (mid-to-late 1990s)- Used only for Vons stores in Southern California. This was the first Vons ad campaign since Safeway took over ownership of the chain.
• Delivering Our Best (late 1990s–2005) Used only for Vons stores in Southern California, as a regional variant of the Safeway slogan.
• Today's Better Way (1990s) Main slogan for Safeway locations in Canada before Giving Our Best was used in the early 2000s.
• Ingredients for life (2005–present)

[edit] Image gallery

Safeway's "life icon" was introduced as part of its brand-repositioning in 2005

Typical exterior appearance of an early 21st century Safeway store in Sunnyvale, California.

An older store design from the 1970s and 1980s seen in this San Jose, California store

A Safeway.com delivery truck

[edit] References

1. ^ Rumor: Sears eyes Safeway purchase. Inside Bay Area (November 10, 2006). Retrieved on 13 November 2006.

[edit] External links

• Safeway portal
• The Reckoning: Safeway LBO Yields Vast Profits but Exacts A Heavy Human Toll
• NotForTourists.com A Tract On Washington, D.C., Safeway Identities (PDF file)