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This article is about the U.S.-based supermarket corporation. For Safeway, see Safeway (disambiguation).
Safeway, Inc.
Company typePublic (NYSE: SWY)
IndustryRetail (Grocery)
Founded1915 (American Falls, Idaho)
HeadquartersPleasanton, California
Key people
Steven Burd, CEO & Chairman
ProductsBakery, dairy, deli, Dry Cleaning, frozen foods, general grocery, meat, pharmacy, Photo Dept., produce, seafood, snacks, liquor, flowers, Western Union and lottery
Revenue38.4 billion USD (2005)
561 million USD (2005)
Number of employees
201,000 (2005)[1]
Websitewww.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 western and central United States and western Canada.[2] 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.[3] Based on 2005 revenue, Safeway is the tenth-largest retailer in the United States.[4]

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 in partnership with the Tamimi Group in the 1970s and Kuwait during the 1970s and 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 was absorbed by Morrisons in 2004), 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.[5]

Corporate governance

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.[6]

Environmental issues

On July 23, 2007, a city council hearing in Annapolis, Maryland, convened to consider a citywide ban on plastic shopping bags. These bags are made of polyethylene film, a petroleum product that persists in the environment for up to 1,000 years, allegedly killing wildlife in the process[citation needed]. The bill in question seeks to protect marine wildlife in Chesapeake Bay. Alexandra Cousteau, the granddaughter of Jacques Cousteau and director of an environmental education group called Earth Echo, attended the hearing in support of the bill. Also present at the meeting was a lobbyist for Safeway, who vehemently opposed the measure in the heated rhetoric of the war on terror: "At the hearing, a lobbyist for Safeway called the bill un-American, saying it would take choices away from consumers."[2] Plastic bags are a widely recognized cause of plastic waste pollution in the oceans and rivers of the world[citation needed]. According to the Sierra Club, "[a] few years ago the Algalita Research Foundation took samples from a wide swath of the Northern Pacific Ocean and found it to be a plastic soup containing 6 pounds of plastic trash for every pound of plankton"[3]. Despite claims made by major purveyors of plastic shopping bags (like Safeway) about the recycling potential of polyethylene film garbage such as plastic grocery bags, only 1% of the trillion plastic bags made worldwide are ever recycled.[citation needed] "Safeway and Albertsons maintain collection bins for used plastic bags. In 2003 Safeway collected 7,000 tons of plastic grocery bags, pallet-wrap plastic, and dry cleaners' bags. The plastic is sold to a company that makes Trex, lumber-like boards generated from plastic bags and 'reclaimed pallet wood and waste wood.'Composite lumber made partly with plastic is not considered to be recyclable even though it may last a long time". [4].

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.[7]

Brands

Past brands

The company's most notable private label brands from the past are Lucerne, Empress, Scotch Buy, and Townhouse. Of these four brands only Lucerne remains.[citation needed]

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 more upscale deli products and Lucerne remains as the main dairy line. In 2006, Safeway introduced a new line, with organically grown and processed line of products named O Organics.

Some of the brands in use today are:

  • Safeway Select- These are mostly the upscale items.
  • Safeway - This includes non-branded items like Go2 Cola, that have unique names, and are not a whole brand to themselves. It is also used on items that just have descriptive titles instead of names.
  • Primo Taglio- The upscale deli cold cut brand.
  • Basic Red - Mostly paper products, but includes large tubs of ice cream.
  • Lucerne - The main dairy brand, used for ice cream, cheese, yogurt, and milk.
  • Dairy Glen - A second dairy brand, used for. It is also used for the two gallon tubs of ice cream.
  • O Organics - Line of organic products.
  • Ranchers Reserve - The upscale meat brand.
  • The Butchers Cut - Secondary meat brand used for prepackaged cold cut and raw meats.
  • The Produce Stand - Prepackaged produce such as baby carrots, salads, and raisins.
  • The Deli Counter- A secondary deli brand used mainly for cold cuts.
  • Gourmet Meat Shoppe - Frozen meat products
  • Manor House- Another frozen meat line used for turkeys during the holidays.
  • Captains Choice - Seafood Brand
  • Oven Joy - Bread brand that is neither Safeway, O Organics, Eating Right nor Safeway Select
  • Priority - Pet care brand.
  • Remarkable - Used for the Texas based stores.
  • Eating Right - Brand used for healthier eating using labels such as low fat, low sodium, etc.
  • 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".[8]

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 adjust theirs accordingly. Stores offer a six, seven, ten, eleven, or fifteen cent per gallon discount on purchases over $50 (after club/coupon savings), encouraging consumers to buy more products. Products typically not included range from alcohol, tobacco, pharmaceuticals, lottery tickets, fuel purchases, and sales tax.

Safeway ATM Network

The Safeway ATM Network is operated in Colorado, Oregon, Wyoming and Washington. There are typically two machines 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.

Banners

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

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[verification needed]) - 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[verification needed]–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)

SCOP: Safeway Category Optimization Process

Safeway recently transitioned from regional control of their product assortments to national category management, known as the Safeway Category Optimization Process or SCOP. With all dry grocery corporate buying done from Safeway's Pleasanton offices, it is said to 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 you 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 corprate level.

Safeway Nicknames

In Washington, D.C., many of the neighborhood Safeway stores have been given nicknames by residents both to 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" (known for bare shelves and slow service), the "Not-So-Safeway" or "Unsafeway" (in a not-so-great neighborhood), the "Sodomy Safeway" (in the gayborhood), the "Senior Safeway" (located in the Watergate complex and patronized mostly by elderly residents there), the "Social Safeway" (located in upper Georgetown and patronized by many young singles and embassy personnel), the "Salsa or Spanish Safeway" (in a mostly-Hispanic neighborhood), and the "Secret Safeway" (located in a nondescript building with little Safeway signage and known mostly to neighborhood residents but few passersby).[9]

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.[10]

In addition, Safeway employees have been known to nickname the company as "Slaveway".

Safeway Music

Safeway Music is provided by In-Store Broadcasting Network, giving store personnel a plethora of songs with which to serenade shoppers. The satellite network also beams commercials and advertisements for Safeway products and brands that play intermittently with the music.

In Canada (and various other divisions in the past up until 2004), the "Bread song": Fats Domino's "I'm Walkin'" Plays at 5 PM local time 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.[citation needed]

Popular favorites in the Safeway music library include songs by:

References

  1. ^ Safeway.Com (PDF file) Safeway Factbook 2006
  2. ^ Stores by Division/State, Safeway, Inc. Last accessed February 17, 2007.
  3. ^ 2007 Top 75 North American Food Retailers, Supermarket News, Last accessed December 29, 2007.
  4. ^ Top 100 Retailers: The Nation's Retail Power Players (PDF), Stores, July 2006.
  5. ^ "Sears may have eye on Safeway". Chicago Sun-Times. November 9, 2006. {{cite web}}: Check date values in: |date= (help); Unknown parameter |accessdaymonth= ignored (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)
  6. ^ Corporate Governance (PDF), Safeway, Inc. Last retrieved January 29, 2007.
  7. ^ Safeway stores by location, Safeway Inc.
  8. ^ Safeway ready to unveil new 'branding' campaign, Supermarket News, March 2005.
  9. ^ Not For Tourists, 2006 (PDF file) A Feature On Washington, D.C., Safeway Identities
  10. ^ [1] A Blog one of many referring to the Marina Safeway in San Francisco as "Dateway"
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