Safeway 2011 Annual Report Download - page 25

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SAFEWAY INC. AND SUBSIDIARIES
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 2011:
U.S. Canada
Milk plants 63
Bakery plants 62
Ice cream plants 22
Cheese and meat packing plants – 1
Soft drink bottling plants 4–
Fruit and vegetable processing plants 1 3
Cake commissary 1–
Sandwich commissary –1
Total 20 12
In addition, the Company operates laboratory facilities for quality assurance and research and development in certain
plants and at its corporate offices.
Distribution Safeway has 17 distribution/warehousing centers (13 in the United States and four in Canada), which
collectively provide the majority of all products to Safeway’s 12 retail operating areas. The distribution centers in Maryland
and British Columbia are operated by third parties.
Capital Expenditure Program A key component of the Company’s long-term growth strategy is its capital
expenditure program. The Company’s capital expenditure program funds, among other things, new stores, remodels,
retail shopping center development, manufacturing plants, distribution facilities and information technology. Safeway’s
management has maintained a rigorous program to select and approve new capital investments.
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