Safeway 2008 Annual Report Download - page 25

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SAFEWAY INC. AND SUBSIDIARIES
• Unanticipated events or changes in real estate matters, including acquisitions, dispositions and impairments;
• Adverse weather conditions;
• Performance in new business ventures or other opportunities that we pursue, including Blackhawk; and
• The capital investment in and financial results from our Lifestyle stores.
We undertake no obligation to update forward-looking statements to reflect new information, events or developments
after the date hereof. For additional information regarding these risks and uncertainties, see “Item 1A. Risk Factors.”
These are not intended to be a discussion of all potential risks or uncertainties, as it is not possible to predict or identify all
risk factors.
PART I
Item 1. Business
General Safeway was incorporated in the state of Delaware in July 1986 as SSI Holdings Corporation and, thereafter,
its name was changed to Safeway Stores, Incorporated. In February 1990, the Company changed its name to Safeway
Inc.
Safeway Inc. is one of the largest food and drug retailers in North America, with 1,739 stores at year-end 2008. The
Company’s U.S. retail operations are located principally in California, Oregon, Washington, Alaska, Colorado, Arizona,
Texas, the Chicago metropolitan area and the Mid-Atlantic region. The Company’s Canadian retail operations are located
principally in British Columbia, Alberta and Manitoba/Saskatchewan. In support of its retail operations, the Company has
an extensive network of distribution, manufacturing and food-processing facilities.
Safeway owns and operates GroceryWorks.com Operating Company, LLC (“GroceryWorks”), an online grocery channel
doing business under the names Safeway.com, Vons.com and Genuardis.com (collectively “Safeway.com”).
Safeway also has a 49% ownership interest in Casa Ley, S.A. de C.V. (“Casa Ley”) which operates 146 food and general
merchandise stores in Western Mexico.
Blackhawk, a subsidiary of Safeway, provides third-party gift cards, prepaid cards, telecom cards and sports and
entertainment cards to a broad group of top North American retailers for sale to retail customers. Blackhawk also has gift
card businesses in the United Kingdom, France and Australia.
Stores Safeway’s average store size is approximately 46,000 square feet. The Company determines the size of a new
store based on a number of considerations, including the needs of the community the store serves, the location and site
plan and the estimated return on capital invested. Safeway’s “Lifestyle” store showcases the Company’s commitment to
quality with an expanded perishables offering. It features an earth-toned décor package that is warm and inviting with
special lighting to highlight products and departments, custom flooring and unique display features. The Company
believes this warm ambience significantly enhances the shopping experience.
Safeway’s stores provide a full array of grocery items tailored to local preferences. Most stores offer a wide selection of
food and general merchandise and feature a variety of specialty departments such as bakery, delicatessen, floral and
pharmacy. In addition, many stores offer Starbucks coffee shops and adjacent fuel centers.
Safeway continues to operate a number of smaller stores that also offer an extensive selection of food and general
merchandise and that generally include one or more specialty departments. These stores remain an important part of the
Company’s store network in smaller communities and certain other locations where larger stores may not be feasible
because of space limitations and/or community needs or restrictions.
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