Safeway 2010 Annual Report Download - page 29

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SAFEWAY INC. AND SUBSIDIARIES
Energy and Fuel Safeway’s operations are dependent upon the availability of a significant amount of energy and fuel
to manufacture, store and transport products. Energy and fuel costs have experienced volatility over time. To reduce the
impact of volatile energy costs, the Company has entered into contracts to purchase electricity and natural gas at fixed
prices to satisfy a portion of its energy needs. This is discussed further in Part II, Item 7A of this report under the caption
“Commodity Price Risk.”
Safeway also sells fuel. Significant increases in wholesale fuel costs could result in retail price increases and in lower gross
profit on fuel sales. Additionally, consumer demand for fuel may decline if retail prices increase. Such volatility and the
impact to our operations and financial results are difficult to predict with certainty.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The information required by this item is set forth in Part I, Item 1 of this report.
Item 3. Legal Proceedings
Information about legal proceedings appears under the caption “Legal Matters” in Note M to the consolidated financial
statements set forth in Part II, Item 8 of this report.
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