Safeway's Center Store Revival Ups Sales as Much as 25%

PLEASANTON, Calif. -- The solution-selling strategies of Safeway, Inc. here are bringing new life to the center store, with the retailer seeing sales growth ranging from 4 percent to 24.7 percent among top CPG brands.

The center store program is part of a strategy of innovation driving the Pleasanton, Calif.-based retailer's growth initiative, Brian Cornell, Safeway's c.m.o., said yesterday. Innovation, he added, was one of four pillars that also include differentiating the business through the quality of its perishables, an expansion of its proprietary brands, and its Lifestyle format stores.

Cornell spoke of the company's strategy at the 13th Annual Bear Stearns Retail, Restaurants, and Consumer conference in New York.

Key to perishables growth and differentiation, he said, is a focus on organics and quality driven by an improvement in the supply chain and cold chain. "We also have made a major commitment to foodservice," said Cornell. "We want it to be restaurant-quality, on par with what consumers expect from a sit-down restaurant."

Back in center store, the retailer's focus on proprietary brands has resulted in its O organic line of products the largest-selling organic brand in sales per store across the country, Cornell said. More products are developed for the line daily. "We are rolling out babies' and kids' products as we speak," he said.

Regarding retail development, Safeway's Lifestyle format continues to be rolled out at a rate of 300 stores per year, and the retailer will have 60 percent of its stores remodeled by year's end, and 77 percent under the new format by the end of 2008.

Safeway operates more than 1,700 stores in 24 states.
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