Safeway

This article is about article is about the US-based corporation. For Safeway, see Safeway (disambiguation).

Safeway, Inc.

Safeway
Company type	Public(NYSE: SWY)
Industry	Retail (Grocery)
Founded	1915 (American Falls, Idaho)
Headquarters	Pleasanton, California
Key people	Steven Burd, CEO & Chairman
Products	Bakery, dairy, deli, frozen foods, general grocery, meat, pharmacy, produce, seafood, snacks, liquor, flowers, Western Union and lottery
Revenue	38.4 billion USD (2005)
Net income	561 million USD (2005)
Number of employees	201,000 (2005)
Website	www.safeway.com

Safeway Inc. (NYSE: SWY), a Fortune 500 company, is North America's second largest supermarket chain, with over 1750 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. Supermarket News ranked Safeway No. 4 in the 2007 "Top 75 North American Food Retailers" based on 2006 fiscal year estimated sales of $40.5 billion. Based on 2005 revenue, Safeway is the tenth-largest retailer in the United States.

History

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.

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.

1980s: Takeover and sell-offs

File:Safeway1970slogo.gif

The Ribbon Leaf logo

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. (The Houston division was bought by a management-led group and became AppleTree Markets.) 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.

In late 1987 Safeway acquired the Woodward’s Food Floors, which operated in the western Canadian provinces of British Columbia and Alberta.

The company was taken public again in 1990.

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. Safeway also created 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 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 Holdings Corporation may buy Safeway.

Corporate governance

Safeway headquarters in Pleasanton

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.

Locations

Safeway has a total of 1,534 stores in the United States and 221 stores in Canada, over 80% of which are located in Western states and provinces. The greatest concentration of Safeway branches is in California with 539 stores (including the 303 branded as Vons), followed by Washington State with 168 stores and Colorado with 121. In Canada, the greatest number of Safeway locations is in Alberta with 89 stores and British Columbia with 77 stores.

Brands

Past brands

The company's most notable private label brands from the past are Lucerne, Empress, and Townhouse, of the three brands only Lucerne remains and it has been renamed OmniBrands.

Brands today

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 is still used as a dairy line. In 2006, Safeway introduced an organically grown and processed line of products named O Organics.

Some of the brands in use today are:

• Safeway Select (which includes the sub-brand Primo Taglio)- This is mostly the upscale items.
• Safeway - This is the non-branded items and Items like Go2 Cola that have unique names but aren't a whole brand to themselves.
• Basic Red - This is used mostly for paper products it is also used for the two Gallon Tubs of Ice Cream
• Lucerne - This is one of two brands for dairy
• Dairy Glen - The second Dairy Brand used for the cheaper milk
• O Organics - products that are Organic
• The Produce Stand - prepackaged Produce (Baby Carrots, Raisins etc.)
• Priority - pet care brand.
• Ranchers Reserve - The upscale meat brand
• Butchers Cut- secondary meat brand
• Gourmet Meat Shoppe - Frozen meat products
• Captains Choice- Seafood Brand
• Oven Joy -Bread brand that isn't Safeway or Safeway select
• Firefly Ridge- Wine
• Diablo Creek- Wine
• Spirits all have different labels depending on the individual variety.

Lifestyle branding

Safeway store in Kailua, Hawaii.

On April 18, 2005, Safeway began a $100 million brand re-positioning 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".

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. Many locations are being converted to the "Lifestyle" format. The new look was designed by Michigan-based Avizia Inc. 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 that this rebranding campaign had a major impact on sale figures.

Safeway fuel

As well as groceries Safeway has fuel stations at 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, ten, or eleven 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.

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.

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, competes primarily with Wal-Mart
• Dominick's (Dominick's Finer Foods), Illinois supermarket chain
• Genuardi's (Genuardi's Family Markets), Mid-Atlantic supermarket chain
• Pak 'n' Save (warehouse store chain in California)
• Pavilions, upscale division of The Vons Companies, Inc.
• Randall's Food Markets, southeast and central Texas supermarket chain
• Simon David, Dallas, Texas, specialty grocer
• Tom Thumb Food & Pharmacy, northern Texas supermarket chain
• Vons (The Vons Companies, Inc.), Southern California/Nevada supermarket chain

Logos

File:Safeway Medallion.jpg

Safeway Medallion logo, 1980

• The S Medallion (1946–December 1981) - The red "S" part 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.

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. (lyrics acceptable)
• 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 (1983–1986)
• I Work an Honest Day and I Want an Honest Deal (1985–1987) - "America's favorite food store" tagline used with this campaign through 1986 until the buyout and divestitures, which reduced the storecount and made the "America's favorite" line inaccurate. Also featured a song.
• Nobody Does It Better (1992–late 1990s) - 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 (2001–2005)
• 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)

Image gallery

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

Trivia

In Washington, D.C., many of the neighborhood Safeway stores have been given nicknames by residents to both identify the particular store and as a cultural comment of the state of the store or the stereotypes of the demographics of the shoppers inside the stores. Examples include the "Soviet Safeway", the "Not-So-Safeway", the "Senior Safeway", the "Social Safeway", the "Salsa Safeway", and the "Secret Safeway."

Nicknaming has also taken place in the company's home territory of the San Francisco Bay Area. The Safeway in the Marina District of San Francisco is commonly called "Dateway", a reference to the high number of singles who shop in the store .

"SAFEWAY Music"

Often referred to as "Safeway Music" the Safeway Satellite network provides a plethora of music which allows store managers to select which genre(s) of music they prefer and upload them to a dedicated media computer inside the store. The satellite network also beams commercials and advertisements for Safeway products and brands that play intermitently with the music.

In Canada, Manitoba/Ontario Districts the "Bread song": Fats Domino's "I'm Walkin'" Plays at both 5 and 6 pm EST daily (once for each timezone's 5 o'clock) to remind the bakery staff to remove the fresh bread from the ovens and bring it to the floor for the Fresh French Bread at 5 campaign.

Popular favorites in the Safeway music library include songs by:

• Coldplay
• Billy Joel
• Gloria Estefan
• REO Speedwagon
• Tina Turner
• Dionne Warwick
• The Eagles (particuarly:Boys of Summer and, Hotel California)
• O Town
• The Wallflowers (particuarly: 6th Avenue Heartache)
• Bonnie Tyler (particularly: Total Eclipse of the Heart)
• Chicago (praticuarly: You're the Inspiration)
• Steve Winwood
• Bon Jovi

External links

• Safeway portal
• The Reckoning: Safeway LBO Yields Vast Profits but Exacts A Heavy Human Toll