Safeway 2000 Annual Report Download - page 5

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3
6.83 times despite the additional debt incurred to
finance the acquisition of Randall’s in September
1999 and the repurchase of Safeway stock in
late 1999.
During the fourth quarter of 2000, there was
a 47-day strike involving the Teamsters union
and Summit Logistics, the company that operates
our Northern California Division’s distribution
center. Although the strike was settled on favor-
able terms, it had a one-time adverse effect on
sales, product costs and distribution expenses
at 246 Safeway stores in northern California,
Nevada and Hawaii. We estimate the strike
reduced fourth-quarter earnings by approximately
$0.13 per share.
CAPITAL SPENDING
Capital spending increased to approximately
$1.8 billion in 2000. During the year we
opened 75 new stores, expanded or remodeled
275 existing ones and closed 46 older stores,
resulting in a 4% net addition to total retail
square footage. In 2001 we expect to invest
more than $2.1 billion and open 90 to 95 new
stores while completing some 250 remodels.
At Safeway, capital spending is a carefully
planned, highly disciplined process. Projects are
tracked over an extended period to measure
actual results against targeted rates of return.
Almost 85% of our sales come from stores
located in areas growing faster than the national
average in the U.S. and Canada. By concentrating
the majority of our capital spending in attractive,
high-growth areas where we command strong
market positions, we believe we enhance our
prospects for long-term sales growth and operat-
ing margin improvement.
ACQUISITIONS
In early February 2001, we acquired Genuardi’s
Family Markets, Inc. which, at the close of the
transaction, operated 39 stores in Pennsylvania,
Delaware and New Jersey. One of the region’s
leading supermarket chains, Genuardi’s is
renowned for superior-quality perishables
and great customer service. Its operating philos-
ophy and corporate culture should mesh well
with Safeway’s.
Later in February 2001, we purchased 11 ABCO
stores in Arizona to complement our 89-store
Phoenix Division. We anticipate considerable
benefits from the combined operation.
Acquisitions continue to be a key element
of our long-range growth strategy. As addi-
tional assets that meet our criteria become
available, we intend to evaluate them for
possible purchase.
COMMUNITY INVOLVEMENT
During 2000 we made cash and in-kind contri-
butions to numerous non-profit organizations
throughout the communities we serve.
Among these donations was approximately
$20 million worth of merchandise to food banks
and various programs to assist the hungry. We
also contributed over $20 million to local schools
through innovative fundraising programs. In
addition, we supported hundreds of local civic,
charitable and cultural organizations within our
operating areas.