Safeway's Burd: Life After 'Lifestyle' Means Acquisitions, New Formats

Press enter to search
Close search
Open Menu

Safeway's Burd: Life After 'Lifestyle' Means Acquisitions, New Formats

PLEASANTON, Calif. - Acquisitions, new formats, and of course, Blackhawk will be the chief growth engines for Safeway once the chain completes the rebranding of its stores to the Lifestyle concept, said president, c.e.o., and chairman Steve Burd, who spoke during the company's 2007 investors conference yesterday.

Burd said the chain expects to complete the store rebranding project in just over three years.

Also during this meeting, Safeway's board approved a 20 percent dividend increase from 5.75 cents per share to 6.9 cents per share on a quarterly basis, payable on July 19, 2007.

"In 2006 we had $40 billion in sales and just under 1,800 stores," said Burd. "We continue to have a large market share, and are No. 1 or 2 in each market. We had a 4.6 percent sales increase from 2006, and our earnings per share is $1.72, up 23 percent."

Burd said the factors that contributed to this success included strong same-store sales, which exceeded 3 percent each of the four quarters for 2006; a decrease in operating and administrative expenses for the second consecutive year, and continued strong performance among its Lifestyle stores.

"Our Lifestyle store performance, which continues to be fantastic, continues to generate returns in excess of 30 percent," said Burd. "Our branding efforts -- which are really branding the shopping experience -- continue to win consumers and drive loyalty. And this good sales performance is happening across the company. It's not the same in every market, but in Q1 all 10 divisions had positive identical store sales, which is significant for us."

During this time Safeway has been the good corporate citizen, donating hundreds of millions to charitable causes each year, and increasing its focus on the environment, including a reduction of energy and greenhouse gas emmissions, and recycling programs.

Looking to the future, the industry should expect more of the same, said Burd. "We'll drive innovation in supermarket operations, grow Blackhawk, and continue improving quality of perishables. We have a process internally for developing new growth engines. And once the Lifestyle remodels are completed, we'll be getting back to acquisitions."