Safeway Inc.

ABOUT THIS COMPANY:

Safeway is one of the largest grocery and drug retailers in North America. The Safeway chain consists of more than 1,817 stores in the U.S. and western Canada that operate under the Safeway, Genuardi's, Vons, Dominick's, Randall's, and Carrs names. Safeway also has a 49 percent interest in Casa Ley, which operates 99 stores in western Mexico. The company also owns 50 percent of GroceryWorks, which runs Safeway's online grocery and delivery service. For the full year 2007, Safeway brought in $42 billion in sales, up slightly from $40 billion in 2006.

The Safeway story

M.B. Skaggs opened his first grocery store in American Falls, Idaho, in 1915. After a period of expansion and mergers, Skaggs' enterprise became known as Safeway in 1926. Two years later, the company was listed on the New York Stock Exchange. In 1986 the company was taken private in a leveraged buyout by partnerships that included Safeway's management. Over the next four years, some 1,000 Safeway stores were closed or sold to help pay down part of the company's $5.7 billion debt. Safeway re-entered the public market in 1990 and trades once again on the New York Stock Exchange.

The links in the Safeway chain

In the late 1990s, Safeway embarked on a series of acquisitions that nearly doubled its size. In 1997 it purchased the Vons Companies, a food and drug retailer operating some 320 stores under the Vons and Pavillions names in Southern California. The following year, Safeway bought Dominick's Supermarkets in Chicago, adding 116 stores to its chain. In 1999 Safeway acquired Carr-Gottstein, Alaska's largest retailer with almost 50 stores. Later that year it spent $1.8 billion in cash and stock to buy Randall's Food Markets, which operated 117 Randall's and Tom Thumb stores in Texas at the time of the acquisition. Safeway expanded once again in 2001 when it purchased Genuardi's Family Markets, adding 39 stores in Pennsylvania, Delaware and New Jersey to the growing Safeway family. But the company doesn't just expand; it also takes care of the locations it already has. During 2003, the company invested $936 million in capital expenditures, opening 40 new stores and expanding or remodeling 75 existing more while closing 31 older, less profitable locations. The company also opened 56 fuel centers adjacent to its stores, bringing the total number of fuel centers to 270 as of the end of 2003. In 2004, Safeway has said that it expects to invest between $1.2 billion and $1.4 billion in capital expenditures and open another 45 new stores, remodel 160 to 165 stores and add another 50 to 60 fuel centers.