Safeway Inc. a Fortune 500 company, is North America's third largest supermarket chain, with, as of December 29, 2007, 1743 stores located throughout the western and central United States and western Canada. It also operates some stores in the Mid-Atlantic region of the Eastern Seaboard. The company is headquartered in Pleasanton, California. Supermarket News ranked Safeway No. 4 in the 2007 "Top 75 North American Food Retailers" based on 2006 fiscal year estimated sales of $40.5 billion. Based on 2005 revenue, Safeway is the tenth-largest retailer in the United States.
Seelig and Skaggs Merger
Sam Seelig Company was founded in April 1912 by Sam Seelig who opened a single grocery store in Los Angeles
at the corner of Pico and Figueroa streets. The chain had grown to 71 stores by 1922. Sam Seelig left the company in 1924 to enter the real estate business, forming Sam Seelig Realty. As a result of Seelig's departure, the company held a contest in 1925 to develop a new name, the result of which was Safeway. The original slogan was "an admonition and an invitation" to "Drive the Safeway; Buy the Safeway." By 1926 Safeway Stores had 322 stores centered in Southern California
The Safeway chain expanded further in a merger engineered by Charles Merrill of Merrill Lynch on July 1, 1926 of Safeway with 673 stores from Skaggs United Stores of Idaho and Skaggs Cash Stores of California. The merger immediately created the largest chain of grocery stores west of the Mississippi. Charles Merrill later left Merrill Lynch, for a period of time, to run Safeway in the 1930s. At the time of the merger, the company was headquartered in Reno, Nevada, but in 1929, Safeway relocated its headquarters to a former grocery warehouse in Oakland, California. Safeway headquarters moved into Emil Hegstrom's Mutual Creamery Building on East 14th Street and remain there until the move to Pleasanton.
Skaggs Stores (see Skaggs Companies) had its start in 1915, when Marion B. Skaggs purchased his father's grocery store in American Falls, Idaho, for $1,089. The chain, which operated as two separate businesses, Skaggs' Cash Stores and Skaggs United Stores, grew quickly, and Skaggs enlisted the help of his five brothers to help grow the network of stores, which reached 191 by 1920. On completion of the Skaggs/Safeway merger, M.B. Skaggs became the Chief Executive of the business. Skaggs retired from the Safeway board of directors in 1941.
Safeway, with financing
supplied by Merrill Lynch
, then began to aggressively acquire numerous regional grocery store
chains in a rollup
strategy. Early acquisitions included significant parts of Piggly Wiggly
chain as part of the break up of that company by Merrill Lynch and Wall Street
. Early acquisitions included H.G. Chaffee of Southern California
(84 grocery stores), MacMarr (a California chain also assembled by Charles Merrill
), owned by stores the Sanitary Grocery Company of Washington D.C.
(including 49 Piggly Wiggly
stores), Daniel Reeves of New York
(498 grocery stores), National Grocery of New Jersey
(84 grocery stores), the Arizona Grocery Company, and its subsidiary Pay'n Takkit Stores, Newway Stores in El Paso, Texas, Sun Grocery in Tulsa, Oklahoma, and Bird Stores of Kansas City
(including 224 Piggly Wiggly
stores). The company
also acquired the 91 west coast
Piggly Wiggly Pacific Company stores and the 174 stores of Piggly Wiggly Western States Company. Most acquired chains retained their own names until the mid 1930s. Hegstrom's a chain of Oakland, California
stores controlled by Mutual Creamery owner Emil Hegstrom acquired by Safeway in the mid 1950's.
The number of stores peaked at 3,527 in 1931, when the numerous smaller grocery stores began being replaced with larger supermarket stores.
The company's New York operations were sold in 1961 to Finast.
International expansion was an early part of the Safeway's growth. The company expanded into Canada
in 1929 through the acquisition of nine stores (which became Canada Safeway), into the United Kingdom
in 1962 with the acquisition
of the 11-store John Gardner Limited (which became Safeway plc
), into Australia
in 1963 with the acquisition of three Pratt Supermarkets (which became Safeway Australia
, and into Germany in 1964 with the acquisition of two Big Bār Basar (Big Bear) stores. The company also had operations in Saudi Arabia
in a licensing and management agreement with the Tamimi Group
during the 1980s. In 1980, Safeway acquired the 31-store Jack the Slasher chain in Queensland
, Australia, and in 1981 acquired 49% of Mexican retailer Casa Ley
In 1947 the company's sales exceeded $1 billion for the first time. By 1951 total sales had reached nearly $1.5 billion. In 1952 the company adopted the now famous S logo.
In 1959, Safeway opened its first store in the new state of Alaska, being the first major food retailer to enter the market. In 1963 Safeway again opened stores in Hawaii, having exited this market in 1934.
1980s: Takeover and sell-offs
Following a hostile takeover bid from corporate raiders Herbert and Robert Haft, the chain was acquired by KKR acting as a white knight in 1986. With the assistance of KKR, the company was taken private, and assumed tremendous debt. To pay off this debt, the company sold the West Germany and UK divisions (Safeway plc, which was absorbed by Morrisons in 2004), Dallas, Salt Lake City, El Paso, Oklahoma stores, and the Liquor Barn divisions in 1987, and the Kansas City, Little Rock, and Houston divisions in 1988. (The Houston division was bought by a management-led group and became AppleTree Markets.) Safeway's national presence was reduced to Northern California and several western states, plus the Washington, D.C. area. Safeway Australia was sold to the Australian-based Woolworths Limited in 1985. Altogether, nearly half the 2,200 stores in the chain were sold.
In Southern California, Safeway sold most of its stores to Vons in exchange for a 30% interest in the company. Safeway pulled out of established markets like Los Angeles and San Diego, and diminishing operations in Fresno, Modesto, Stockton, and Sacramento. Save-Mart purchased the few remaining Fresno stores in 1996.
In late 1987 Safeway acquired the Woodward's Food Floors, which operated in the western Canadian provinces of British Columbia and Alberta.
The company was taken public again in 1990.
1990s and beyond
In the late 1990s, Safeway began to again aggressively acquire regional chains, including Randall's Food Markets
, and Dominick's
. In 1997, it exercised its option to acquire control of Vons
in Southern California
In 2001, Safeway acquired the family-owned Genuardi's chain, which had/has locations in Pennsylvania, New Jersey, and Delaware. This was a failure at first, with local shoppers not pleased with Safeway's changes. Safeway also created subsidiary "Blackhawk Network", a prepaid and payments network, a card-based financial solutions company, and a provider of third-party prepaid cards.
In October 2003, a strike was called by members of the United Food and Commercial Workers at Vons stores in Southern California. The strike (and concurrent lockout at Albertsons and Ralphs) lasted until the end of February 2004.
In January 2006, Dateline NBC conducted a grocery store investigation of ten of the largest grocery stores in the nation, and found Safeway to be the most hazardous grocery store, with 25 critical violations per each ten visits. The company reported to NBC that "Safeway has 'continued to enhance and re-energize store adherence to our food safety and sanitation standards.'"
In November 2006, speculation rolled around as The Chicago Sun Times reported that Sears Holdings Corporation may buy Safeway.
Other Store Formats & Concepts
Safeway had drug store
operations, formed in 1962 under the Super S brand, which were sold in 1971. The company also made a number of attempts to re-used older, smaller store sites, opening Food Barn, a discount grocery outlet, and Liquor Barn, a discount liquor outlet, in the 1970's. Safeway also trialled Town House in Washington D.C.
, small stores targeting apartment dwellers, and a gourmet store concept, Bon Appetit in San Francisco
In 1969 Safeway formed a joint venture with Holly Farms Poultry Industries (now part of Tyson Foods) to open "Holly Farms Fried Chicken Take Home" in an effort to diversify into fast food restaurants and compete with Kentucky Fried Chicken. The first store opened in Colonial Heights, Virginia in August 1969.
Current members of the board of directors
of the company are: Steven Burd, Janet Grove, Mohan Gyani, Paul Hazen
, Robert MacDonnell, Douglas Mackenzie, Rebecca Stirn, William Tauscher, and Raymond Viault.
On July 23
, a city council hearing in Annapolis
, convened to consider a citywide ban on plastic shopping bags. These bags are made of polyethylene film, a petroleum product that persists in the environment for up to 1,000 years, allegedly killing wildlife in the process. The bill in question seeks to protect marine wildlife in Chesapeake Bay
. Alexandra Cousteau
, the granddaughter of Jacques Cousteau
and director of an environmental education group called Earth Echo
, attended the hearing in support of the bill. Also present at the meeting was a lobbyist for Safeway, who vehemently opposed the measure in the heated rhetoric of the war on terror: "At the hearing, a lobbyist for Safeway called the bill un-American, saying it would take choices away from consumers."
Plastic bags are a widely recognized cause of plastic waste pollution in the oceans and rivers of the world. According to the Sierra Club
, "[a] few years ago the Algalita Research Foundation took samples from a wide swath of the Northern Pacific Ocean
and found it to be a plastic soup containing 6 pounds of plastic trash for every pound of plankton"
. Despite claims made by major purveyors of plastic shopping bags (like Safeway) about the recycling potential of polyethylene film garbage such as plastic grocery bags, only 1% of the trillion plastic bags made worldwide are ever recycled. "Safeway and Albertsons maintain collection bins for used plastic bags. In 2003 Safeway collected 7,000 tons of plastic grocery bags, pallet-wrap plastic, and dry cleaners' bags. The plastic is sold to a company that makes Trex, lumber-like boards generated from plastic bags and 'reclaimed pallet wood and waste wood.'Composite lumber made partly with plastic is not considered to be recyclable even though it may last a long time".
Safeway says it is working hard to be a more environmentally friendly corporation by teaming up with CCX to make the world's first and North America's only voluntary, legally binding greenhouse gas emissions reduction, registry and trading program. Governor Schwarzenegger publicly applauded Safeway for this push to help clean up the air. “Safeway has been recognized by the U.S. Environmental Protection Agency Green Power Partnership and the State of California for these innovative environmental programs which are making a significant contribution to reductions in overall carbon emissions and corporate energy consumption. By reducing its greenhouse gas emissions, Safeway is aggressively working to reduce the company's carbon footprint, address climate change and reduce air pollution”, said Safeway's CEO in a September 27, 2006, news release. They are also working to make their fleet run off of biodiesel fuel only. They are making all fuel have 20% biodiesel fuel now
Safeway has a total of 1,521 stores in the United States and 222 stores in Canada, over 80% of which are located in Western states and provinces. The greatest concentration of Safeway branches is in California
with 521 stores (including the 295 branded as Vons
), followed by Washington State
with 168 stores and Colorado
with 122. In Canada, the greatest number of Safeway locations is in Alberta
with 94 stores and British Columbia
with 76 stores.
The company's most notable private label brands from the past are Lucerne
, Scotch Buy
, and Townhouse
. Of these four brands only Lucerne remains in the United States; Lucerne and Empress remain in Canada.
Today, Safeway Select
is the company's signature private label that offers an upscale
range of products, a sub-label Primo Taglio
is used for more upscale deli products and Lucerne
remains as the main dairy
line. In 2006, Safeway introduced a new line, with organically
grown and processed line of products
named O Organics
. In late 2007, the Safeway Select: Signature line was renamed Signature Cafe
Some of the brands in use today are:
- Basic Red — Mostly paper products, but includes large tubs of ice cream.
- Bright Green — Environmentally friendly cleaning products.
- Butcher's Cut, The — Secondary meat brand used for pre-packaged cold cut and raw meats.
- Captains Choice — Seafood brand.
- Dairy Glen — A second dairy brand. It is also used for the two gallon tubs of ice cream.
- Deli Counter, The — A secondary deli brand used mainly for cold cuts.
- Diablo Creek — Wine
- Eating Right — Brand used for healthier eating using labels such as low fat, low sodium, etc.
- Firefly Ridge — Wine
- Gourmet Meat Shoppe — Frozen meat products.
- Jerseymaid — A carryover dairy brand from Safeway's acquisition of Vons, still used due to its reputation.
- Lucerne — The main dairy brand, used for ice cream, cheese, yogurt, and milk.
- Manor House — Another frozen meat line used for turkeys during the holidays.
- Mom to Mom — A full line of baby products.
- O Organics — Line of organic products.
- Oven Joy — Bread brand that is neither Safeway, O Organics, Eating Right nor Safeway Select.
- Primo Taglio — The upscale deli cold cut brand.
- Priority — Pet care brand.
- Produce Stand, The — Pre-packaged produce such as baby carrots, salads, and raisins.
- Ranchers Reserve — The upscale meat brand.
- Remarkable — Used for the Texas based stores.
- Safeway — This includes non-branded items like Go2 Cola, that have unique names, and are not a whole brand to themselves. It is also used on items that just have descriptive titles instead of names.
- Safeway Select — These are mostly the upscale items.
- Signature Cafe — Deli Line of soups, side dishes and pre-made salads.
On April 18, 2005, Safeway began a $100 million brand re-positioning campaign labeled "Ingredients for life." This was done in an attempt to differentiate itself from its competitors, and to increase brand involvement. Steve Burd described it as "branding the shopping experience".
The launch included a redesigned logo, a new slogan "Ingredients for life" alongside a four-panel life icon to be used throughout stores and advertising. Many locations are being converted to the "Lifestyle" format. The new look was designed by Michigan-based Avizia Inc. In addition to the "inviting decor with warm ambiance and subdued lighting", the move required heavy redesign of store layout, new employee uniforms, sushi and olive bars, and the addition of in-store Starbucks kiosks (with cupholders on grocery carts). The change also involved differentiating the company from competitors with promotions based on the company’s extensive loyalty card database. At the end of 2004 there were 142 "Lifestyle" format stores in the United States and Canada, with plans to open or remodel another 300 stores with this type of theme the following year. "Lifestyle format" stores have seen significantly higher average weekly sales than their other stores. By the end of 2006, shares were up proving that this rebranding campaign had a major impact on sale figures.
Safeway has fuel stations at some stores along with a club card discount. In July 2008 Safeway changed the fuel station discount, re-branding it the "Power Pump Rewards." The Power Pump Rewards program offers six, seven, ten, eleven, fifteen, or twenty cent per gallon discount on purchases totaling more than $100 (after club/coupon savings). Purchases of products such as alcohol, tobacco, pharmaceuticals and lottery tickets do not count towards the program.
Safeway ATM Network
The Safeway ATM Network is operated in Colorado
. There are typically two machines located near the front of each store. Cirrus, Plus, Star, and NYCE are on the network. The network was started in late 1998 in Denver and was expanded to Wyoming, Washington, and Oregon.
In addition to the Safeway name, the company also operates stores under the following banners:
- Carrs (Carr-Gottstein Foods), Alaskan supermarket chain
- Casa Ley, food stores in western Mexico, competes primarily with Wal-Mart
- Dominick's (Dominick's Finer Foods), Illinois supermarket chain
- Genuardi's (Genuardi's Family Markets), Mid-Atlantic supermarket chain
- Pak 'n' Save (warehouse store chain in California)
- Pavilions, upscale division of The Vons Companies, Inc.
- Randall's Food Markets, southeast and central Texas supermarket chain
- Simon David, Dallas, Texas, specialty grocer
- Tom Thumb Food & Pharmacy, North Texas supermarket chain
- Vons (The Vons Companies, Inc.), Southern California/Nevada supermarket chain
- The S Medallion (1946–December 1981) — The red "S" part was slightly thinned in late 1957, and would remain in this fashion through 1981.
- The Ribbon Leaf (January 1982–2005) — Safeway used this logo from January 1982 to April 17, 2005. The red stylized "S" was still located in the center.
- The Yin-Yang - Life logo (January 2005 to the present) — The stylized "S" is still located in the center, but is now white.
- Since We're Neighbors, Let's Be Friends (1972–1979) — Probably the first Safeway advertising campaign to make use of a singalong jingle. This slogan was used by the U.S. stores until July 16, 1979, when the "Everything" slogan was adopted. (lyrics acceptable)
- Today at Safeway (used by the Canadian stores during the same period as the American jingle listed above)
- Everything You Want from a Store and a Little Bit More (1979–December 1981) — This campaign, launched on July 16, 1979, was adopted, perhaps, to reflect the image of Safeway stores as "one stop shopping centers." This campaign was used through December 1981, although it was in use in the UK into the 1990s.
- Today's Safeway: Where You Get a Little Bit More (January 1982–1983) — The first Safeway ad campaign to make use of the company's new "ribbon leaf" logo.
- America's Favorite Food Store (1983–1986)
- I Work an Honest Day and I Want an Honest Deal (1985–1987) — "America's favorite food store" tagline used with this campaign through 1986 until the buyout and divestitures, which reduced the storecount and made the "America's favorite" line inaccurate. Also featured a song.
- Nobody Does It Better (1988– late 1990s) — This campaign is unique for being adapted from a pop song. In this case, the song was originally a hit for Carly Simon in 1977. Simon originally sang it as the theme song to 1977's James Bond movie, The Spy Who Loved Me.
- We Bring It All Together (late 1980s–early 1990s) Main slogan for Safeway locations in Canada.
- Giving Our Best (2001–2005)
- Vons is Value (mid-to-late 1990s) — Used only for Vons stores in Southern California. This was the first Vons ad campaign since Safeway took over ownership of the chain.
- Delivering Our Best (late 1990s–2005) Used only for Vons stores in Southern California, as a regional variant of the Safeway slogan.
- Today's Better Way (1990s) Main slogan for Safeway locations in Canada before Giving Our Best was used in the early 2000s.
- Ingredients for life (2005–present)
SCOP: Safeway Category Optimization Process
Safeway recently transitioned from regional control of their product assortments to national category management, known as the Safeway Category Optimization Process or SCOP. With all dry grocery corporate buying done from Safeway's Pleasanton offices, it is said it will increase representation of manufacturers by experienced sales professionals with extensive product and category knowledge. Corporate produce buying offices are located in Phoenix Arizona. This will mean consistency across the Safeway chain, meaning one could go into a store in Winnipeg or San Francisco and find the same products at the same price as all negotiation is now done at the corporate level.
In Washington, D.C., many of the neighborhood Safeway stores have been given nicknames by residents both to identify the particular store and as a cultural comment of the state of the store or the stereotypes of the demographics of the shoppers inside the stores. Examples include the "Soviet Safeway" (now defunct, but once known among residents of the Cleveland Park neighborhood for having an outdated, small space, bare shelves and slow service), the "Not-So-Safeway" or "Unsafeway" (in a not-so-great neighborhood), the "Senior Safeway" (located in the Watergate complex and patronized mostly by elderly residents there), the "Social Safeway" (located in upper Georgetown and patronized by many young singles and embassy personnel), and the "Secret Safeway" (located in a nondescript building off upper Wisconsin Avenue in Northwest Washington with little Safeway signage and known mostly to neighborhood residents but few passersby).
Nicknaming has also taken place in the company's home territory of the San Francisco Bay Area. The Safeway in the Marina District of San Francisco is commonly called "Dateway", a reference to the high number of singles who shop in the store.
Safeway Music is provided by In-Store Broadcasting Network
, giving store personnel a variety of songs to play for shoppers. The satellite network also beams commercials and advertisements for Safeway products and brands that play intermittently with the music.
In Canada (and various other divisions in the past up until 2004), the "Bread song": Fats Domino's "I'm Walkin'" plays at 5 PM local time to remind the bakery staff to remove the fresh bread from the ovens and bring it to the floor for the Fresh French Bread at 5 campaign.
Popular favorites in the Safeway music library include songs by: