Safeway 2000 Annual Report Download - page 12

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10
Growth Through Leadership: Today
2000
HIGHLIGHTS
We continued to exchange
best practices throughout
the company to improve our
cost structure and become
more efficient.
We became a founding
member of the WorldWide
Retail Exchange, a web-
based, business-to-business
marketplace developed
to reduce product procure-
ment costs.
We began converting
Randall’s accounting and
merchandising applications
to Safeway’s automated
systems.
We launched a major
initiative to reduce product
damage and distress, and
to eliminate or curtail
other causes of “shrink.”
96 97* 98 99* 00*
48
35
28 30
4
IMPROVEMENT IN
OPERATING AND
ADMINISTRATIVE
EXPENSE MARGIN
(In basis points)
–(40)
–(20)
–0
–20
Our O&A expense-to-sales
margin declined again
in 2000, continuing an
eight-year trend.
* Pro forma as defined on page 19.
The northern California distribution
center strike adversely affected 2000
by an estimated seven basis points.
CONTROLLING COSTS Pro forma operating and administrative
expense as a percentage of sales declined for the eighth consecutive year in
2000. No other food and drug retailer comes close to matching this record
of ongoing improvement in its cost structure. Building on this trend, we
continue to find new opportunities for significant savings in operating
and administrative expense. In addition, we expect to improve our buying
practices and reduce product costs, further expanding our gross margin.
We try to run the business at its simple best – to exceed our customers’
expectations at the lowest cost.