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Pleasanton, Calif. -- Safeway Inc. said that its fourth-quarter net income rose 13% to $244 million, far ahead of expectations, helped by its customer loyalty program. Safeway said the program, which offers personalized discounts based on past purchases, is driving market share gains and profits.
Quarterly sales rose to $13.77 billion from $13.60 billion a year ago. Same-store sales, excluding fuel, inched up 0.8%.
In the chain’s quarterly conference call, CEO Steven Burd said that approximately 45% of the company’s sales are from members of its loyalty program. To date, the program is performing better than expectations, he added.
"Our best customers are becoming increasingly more loyal and buying more items per trip," Burd said.
The mobile component of the program, which includes apps for most smartphones and an iPad app, has had higher usage than expected, according to Burd. Digital coupons have also performed well he said.
For the year, Safeway’s net income rose 15% to $596.5 million. Revenue rose 1% to $44.21 billion.