Safeway Outlines Growth Vehicles
Pleasanton, Calif. Safeway said on Thursday that it will introduce three new growth vehicles to drive 2008 earnings: experimenting with a new store format, monetizing two of its exclusive product lines and leveraging its health care knowledge, according to a report on supermarketnews.com.
Speaking at an investors conference, Steve Burd, chairman, president and CEO, did not specify what the new format would be, but called it “an experiment, not a launch.” Previous published reports said the chain was seeking sites for stores of 20,000 sq. ft. each in the San Jose area in Northern California. Some analysts speculated the smaller footprint represented Safeway’s response to Tesco’s Fresh & Easy format.
Burd said Safeway also plans to offer its O Organics and Eating Right product lines to other outlets. The third growth initiative would harness knowledge Safeway has accumulated over several years to reduce health care costs by encouraging people to alter individual behavior.
Burd said two of the three new vehicles should make money in 2008, “and they could contribute as much as 10% to 12% of earnings per share over five years.”
Safeway predicts ’08 growth
PLEASANTON, Calif. Safeway today announced its earnings outlook for the year 2008.
Safeway said that it expects earnings per share for 2008 to be in the range of $2.25 to $2.35. The company said it anticipates that identical-store sales growth (excluding fuel) will be in the range of 3% to 3.2%. According to Safeway, the identical sales growth will be strongly affected by contributions from Lifestyle stores and product innovation.
“Innovation has been, and will continue to be, the key to our success,” said Steve Burd, chairman, president and ceo. “We have developed highly successful programs to reduce costs, improve service, enhance the quality of products and the shopping environment, and have established new growth vehicles. We believe this will ensure our long-term growth.”
Meijer looks to enhance supply chain
GRAND RAPIDS, Mich. As part of Meijer’s new requirement for suppliers to generate their own replenishment orders as part of its scan based trading (SBT) program, the company has partnered with Prescient Applied Intelligence, a provider of supply chain and advanced commerce solutions, to test a store level replenishment (SLR) pilot program with one of its major suppliers.
“The SLR pilot program includes about a dozen stores,” said Tim Cronk, supply chain planner at Meijer. “We are using the pilot phase to set benchmarks and expectations for the 150+ store rollout, currently planned for early 2008.”