Safeway 2008 Annual Report Download - page 26

SAFEWAY INC. AND SUBSIDIARIES
The following table summarizes Safeway’s stores by size at year-end 2008:
Square footage
Number
of stores
Percent
of total
Less than 30,000 234 14%
30,000 to 50,000 732 42
More than 50,000 773 44
Total stores 1,739 100%
The following table presents sales revenue by type of similar product (dollars in millions):
2008 2007 2006
Amount % of total Amount % of total Amount % of total
Non-perishables (1) $19,826.5 45.0% $19,178.4 45.4% $18,513.0 46.0%
Perishables (2) 16,514.0 37.4% 15,833.9 37.4% 15,067.3 37.5%
Fuel 3,885.2 8.8% 3,487.8 8.2% 3,002.4 7.5%
Pharmacy 3,878.3 8.8% 3,785.9 9.0% 3,602.3 9.0%
Total sales and other revenue $44,104.0 100.0% $42,286.0 100.0% $40,185.0 100.0%
(1) Consists primarily of general merchandise, grocery, meal ingredients, soft drinks and other beverages, snacks and frozen foods.
(2) Consists primarily of produce, dairy, meat, bakery, deli, floral and seafood.
Store Ownership At year-end 2008, Safeway owned approximately 41% of its stores and leased its remaining stores.
The Company prefers ownership because it provides control and flexibility with respect to remodeling, expansions,
closures and financing terms.
Merchandising Safeway’s operating strategy is to provide value to its customers by maintaining high store standards
and a wide selection of high-quality products at competitive prices. To provide one-stop shopping for today’s busy
shoppers, the Company emphasizes high-quality produce and meat and offers many specialty items through its various
specialty departments.
Safeway is focused on differentiating its offering with high-quality perishables. The Company believes it has developed a
reputation for having the best produce in the market, through high-quality specifications and precise handling
procedures, and the most tender and flavorful meat, through the Company’s Rancher’s Reserve Tender Beef offering. In
addition, Safeway has developed a variety of new items in the deli/food service department, including Signature Cafe
sandwiches, soups and salads that provide meal solutions to today’s busy shoppers.
Safeway has continued to develop its premium line of Consumer Brand products. Hundreds of items have been
developed since 1993 under the “Safeway SELECT” banner. The award-winning Safeway SELECT line is designed to offer
premium quality products that the Company believes are equal or superior in quality to comparable best-selling,
nationally advertised brands, or are unique to the category and not available from national brand manufacturers. The
Safeway SELECT line of products includes: salsas, bagged salads, whole bean coffees, cookies, frozen pizzas, fresh and
frozen pastas and an extensive array of ice creams and hors d’oeuvres.
In late 2005, Safeway introduced the line of OORGANICS food and beverage products. Everything in the OORGANICS
line, which includes more than 300 items, comes from certified organic growers or processors and is USDA-certified
organic. The OORGANICS line includes, among other products: milk, chicken, salads, juices and entrees.
Safeway launched Eating Right, a line of great-tasting, better-for-you products, in July 2007. Eating Right products span
more than 20 categories, including frozen entrees, soups, produce and salad dressings. In 2008, one of the key
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