Safeway 2008 Annual Report Download - page 28

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SAFEWAY INC. AND SUBSIDIARIES
Capital Expenditure Program A key component of the Company’s long-term growth strategy is its capital
expenditure program. The Company’s capital expenditure program funds, among other things, new stores, remodels,
manufacturing plants, distribution facilities and information technology. Over the past five years, the Company has
focused on the Lifestyle store when opening or remodeling stores. Safeway’s management has maintained a rigorous
program to select and approve new capital investments.
The table below details changes in the Company’s store base and presents the Company’s cash capital expenditures over
the last five years (dollars in millions):
2008 2007 2006 2005 2004
Total stores at beginning of year 1,743 1,761 1,775 1,802 1,817
Stores opened:
New 813 7 11 22
Replacement 12 7101011
20 20 17 21 33
Stores closed (1) 24 38 31 48 48
Total stores at year end 1,739 1,743 1,761 1,775 1,802
Remodels completed (2)
Lifestyle remodels 232 253 276 293 92
Other remodels 21 15 8 22 23
253 268 284 315 115
Number of fuel stations at year end 382 361 340 314 311
Total retail square footage at year end (in millions) 80.4 80.3 80.8 81.0 82.1
Cash capital expenditures $ 1,595.7 $ 1,768.7 $ 1,674.2 $ 1,383.5 $ 1,212.5
Cash capital expenditures as a percentage of sales and
other revenue 3.6% 4.2% 4.2% 3.6% 3.4%
(1) Included 14 Dominick’s store closures in 2007, 26 Randall’s store closures in 2005 and 12 Dominick’s store closures in 2004. Such
store closures were part of a program to improve profitability in those divisions. We do not plan to significantly change total retail
square footage or store count in the foreseeable future.
(2) Defined as store remodel projects (other than maintenance) generally requiring expenditures in excess of $0.2 million.
During 2008 Safeway invested $1.6 billion in cash capital expenditures. The Company opened 20 new Lifestyle stores,
remodeled 232 stores to Lifestyle stores and closed 24 stores. The Company also completed 21 other remodels. In 2009
the Company expects to spend approximately $1.2 billion in cash for capital expenditures and to open approximately
10 new Lifestyle stores and to remodel approximately 135 stores to Lifestyle stores. At year-end 2008, 73% of Safeway’s
store base were Lifestyle stores. The Company expects that approximately 82% and 88% of its store base will be Lifestyle
stores by the end of 2009 and 2010, respectively.
Financial Information about Segments and Geographic Areas Note L to the consolidated financial statements set
forth in Part II, Item 8 of this report provides financial information about the Company’s segments and geographic areas.
Trade Names and Trademarks Safeway has invested significantly in the development and protection of “Safeway”
both as a trade name and a trademark and considers it to be an important asset. Safeway also owns more than 400 other
trademarks registered and/or pending in the United States Patent and Trademark Office and other jurisdictions, including
trademarks for its product lines such as Safeway, Safeway SELECT, Rancher’s Reserve, OORGANICS,
8