Safeway 2012 Annual Report Download - page 18

SAFEWAY INC. AND SUBSIDIARIES
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serves, the location and site plan and the estimated return on capital invested. Safeway’s “Lifestyle” store
showcases the Company’s commitment to quality with an expanded perishables offering. It features an earth-
toned décor package that is warm and inviting with special lighting to highlight products and departments,
custom flooring and unique display features. The Company believes this warm ambiance significantly
enhances the shopping experience.
Safeway’s stores provide a full array of grocery items with a portion tailored to local preferences. Most stores
offer a wide selection of food and general merchandise and feature a variety of specialty departments such
as bakery, delicatessen, floral, seafood and pharmacy. In addition, the majority of stores offer Starbucks
coffee shops, and some offer adjacent fuel centers.
Safeway continues to operate a number of smaller stores that also offer an extensive selection of food and
general merchandise and that generally include one or more specialty departments. These stores remain
an important part of the Company’s store network in smaller communities and certain other locations where
larger stores may not be feasible because of space limitations and/or community needs or restrictions.
The following table summarizes Safeway’s stores by size at year-end 2012:
Square footage Number
of stores
Percent
of total
Less than 30,000 193 12%
30,000 to 50,000 673 41
More than 50,000 775 47
Total stores 1,641 100%
Store Ownership At year-end 2012, Safeway owned 45% of its stores and leased its remaining stores.
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 unique
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 and poultry, through both the Company's
Rancher's Reserve Tender Beef offering and Open Nature all natural beef, chicken and sausages. Safeway's
deli/food service department has developed a variety of solutions for today's busy shoppers, including
Signature Café sandwiches, soups and salads as well as Primo Taglio deli meats and cheeses. Many Safeway
bakeries offer freshly made bread, and the floral department is recognized by its signature gazebo.
Safeway has continued to develop its portfolio of Consumer Brands private label products. The Company
has focused its brands into three areas: Health & Wellness, Premium and Core. The prices in each category
are generally lower than those of comparable products from national brands.
The Health & Wellness portfolio includes the O Organics, Eating Right, Open Nature and Bright Green
brands. These offerings address consumers' specific health needs or preferences. O Organics is an
exclusively organic brand. Eating Right offers a "spot your needs" labeling system, and Open Nature is a
line of products that are 100% natural. Bright Green is an environmentally friendly household product line.
The Premium portfolio includes the Safeway SELECT, Signature Café, Rancher's Reserve, Primo Taglio,
Waterfront BISTRO and Debi Lilly offerings. Safeway SELECT is a line of quality products that the Company
believes are unique to the category. Waterfront BISTRO is a seafood brand designed to make preparing a
restaurant-quality meal at home easy. Debi Lilly is a line of unique bouquets, candles, vases and gifts.