Safeway 2010 Annual Report Download - page 21

SAFEWAY INC. AND SUBSIDIARIES
• Data security or other information technology issues that may arise;
• Unanticipated events or changes in real estate matters, including acquisitions, dispositions and impairments;
• Adverse weather conditions and effects from natural disasters;
• Performance in new business ventures or other opportunities that we pursue; 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. The Company’s fiscal year ends on the Saturday nearest December 31. The last three fiscal years consist of the
52-week period ended January 1, 2011 (“fiscal 2010” or “2010”), the 52-week period ended January 2, 2010 (“fiscal
2009” or “2009”) and the 53-week period ended January 3, 2009 (“fiscal 2008” or “2008”).
Safeway Inc. is one of the largest food and drug retailers in North America, with 1,694 stores at year-end 2010. 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 168 food and general
merchandise stores in Western Mexico.
Blackhawk Network, Inc. (“Blackhawk”), a majority-owned subsidiary of Safeway, provides third-party gift cards, prepaid
cards, telecom cards, and sports and entertainment cards through leading grocery, convenience and other retailers in
North America, Europe and Asia.
Stores Safeway’s average store size is approximately 46,700 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, the majority of stores offer Starbucks coffee shops and many offer 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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