Safeway 2008 Annual Report Download - page 30

SAFEWAY INC. AND SUBSIDIARIES
During 2008 contracts covering approximately 42,000 employees were ratified. In particular, United Food and
Commercial Workers International Union (“UFCW”) collective bargaining agreements which covered approximately
36,000 employees, primarily in stores in the Company’s Eastern and Portland divisions, as well as stores in Alberta and
Vancouver, Canada, were ratified.
Available Information Safeway’s corporate Web site is located at www.safeway.com. You may access our Securities
and Exchange Commission (“SEC”) filings free of charge at our corporate Web site promptly after such material is
electronically filed with, or furnished to, the SEC. We also maintain certain corporate governance documents on our Web
site, including the Company’s Corporate Governance Guidelines, our Director Independence Standards, the Code of
Business Conduct and Ethics for the Company’s corporate directors, officers and employees, and the charters for our
Audit, Nominating and Corporate Governance, and Executive Compensation committees. We will provide a copy of any
such documents to any stockholder who requests it. We do not intend for information found on the Company’s Web site
to be part of this document.
Item 1A. Risk Factors
We wish to caution you that there are risks and uncertainties that could affect our business. These risks and uncertainties
include, but are not limited to, the risks described below and elsewhere in this report, particularly in “Forward-Looking
Statements.” The following is not intended to be a complete discussion of all potential risks or uncertainties, as it is not
possible to predict or identify all risk factors.
Competitive Industry Conditions We face intense competition from traditional grocery retailers, non-traditional
competitors such as supercenters and club stores, as well as from specialty supermarkets, drug stores, dollar stores,
convenience stores and restaurants. Increased competition may have an adverse effect on profitability as the result of
lower sales, lower gross profits and/or greater operating costs.
Our ability to attract customers is dependent, in large part, upon a combination of location, quality, price, condition of
assets, marketing and promotional strategies, service and consumer loyalty to other brands and stores. In each of these
areas, traditional and non-traditional competitors compete with us and may successfully attract our customers to their
stores by aggressively matching or exceeding what we offer. In recent years many of our competitors have increased their
presence in our markets. Our responses to competitive pressure, such as additional promotions and increased advertising,
could adversely affect our profitability. We cannot guarantee that our actions will succeed in gaining or maintaining
market share. Additionally, we cannot predict how our customers will react to the entrance of certain non-traditional
competitors into the grocery retailing business.
Because we face intense competition, we need to anticipate and respond to changing consumer demands more
effectively than our competitors. We strive to achieve and maintain favorable recognition of our unique private-label
brands, effectively market our products to consumers, competitively price our products and maintain and enhance a
perception of value for consumers. Finally, we need to source and market our merchandise efficiently and creatively.
Failure to accomplish these objectives could impair our ability to compete successfully and adversely affect our growth
and profitability.
Labor Relations A significant majority of our employees are unionized, and our relationship with unions, including
labor disputes or work stoppages, could have an adverse impact on our financial results.
We are a party to approximately 430 collective bargaining agreements, of which 123 are scheduled to expire in
2009. These expiring agreements cover approximately 10% of our union-affiliated employees. In future negotiations with
labor unions, we expect that rising health care, pension and wage costs, among other issues, will be important topics for
negotiation. If, upon the expiration of such collective bargaining agreements, we are unable to negotiate acceptable
contracts with labor unions, it could result in strikes by the affected workers and thereby significantly disrupt our
operations. Further, if we are unable to control health care and pension costs provided for in the collective bargaining
agreements, we may experience increased operating costs and an adverse impact on future results of operations.
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