Safeway 2010 Annual Report Download - page 22

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SAFEWAY INC. AND SUBSIDIARIES
The following table summarizes Safeway’s stores by size at year-end 2010:
Square footage
Number
of stores
Percent
of total
Less than 30,000 216 13%
30,000 to 50,000 701 41
More than 50,000 777 46
Total stores 1,694 100%
Store Ownership At year-end 2010, Safeway owned 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. Safeway’s deli/food service department has developed a variety of solutions for today’s busy shoppers, including
Signature Café sandwiches, soups and salads.
Safeway has continued to develop its premium line of Consumer Brand products. Hundreds of items have been
developed under the “Safeway SELECT” and other banners. The award-winning Safeway SELECT line offers premium
quality products that the Company believes are unique to the category. The Lucerne brand has been producing quality
dairy products for over 100 years. It offers over 400 items. In addition, Safeway has launched several new brands.
Safeway’s health and wellness portfolio includes OORGANICS, Eating Right, Bright Green and Open Nature. These
offerings address consumers’ specific needs at very affordable prices. We also launched waterfront BISTRO, a restaurant –
quality seafood brand, which has been well received. In 2010, we rebranded our 14 private-label beverage brands under
the Refreshe label.
Manufacturing and Wholesale The principal function of manufacturing operations is to purchase, manufacture and
process private-label merchandise sold in stores operated by Safeway. As measured by sales dollars, 14% of Safeway’s
private-label merchandise is manufactured in Company-owned plants, and the remainder is purchased from third parties.
Safeway’s Canadian subsidiary has a wholesale operation that distributes both national brands and private-label products
to independent grocery stores and institutional customers.
Safeway operated the following manufacturing and processing facilities at year-end 2010:
U.S. Canada
Milk plants 63
Bakery plants 62
Ice cream plants 22
Cheese and meat packing plants – 2
Soft drink bottling plants 4–
Fruit and vegetable processing plants 1 3
Cake commissary 1–
Total 20 12
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