Safeway net rises 9% in fiscal '08

by Eric Schroeder
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PLEASANTON, CALIF. — Net income at Safeway Inc. in the fiscal year ended Jan. 3 totaled $965.3 million, equal to $2.23 per share on the common stock, up 9% from $888.4 million, or $2.02 per share, in fiscal 2007. Net sales rose 4% to $44,104 million.

In a Feb. 26 conference call with securities analysts, Steven Burd, chairman, president and chief executive officer at Safeway, said the company will continue to drive sales and earnings by pushing its private label brands.

"I think that consumers are looking for value," Mr. Burd said. "And we have one of the strongest corporate brands/private label offerings in the sector. And we’re taking advantage of their demand for value and our merchandising, those corporate brands, promoting those corporate brands, and drawing attention to those brands. … It’s terrific when you can have corporate brands like O Organics and Eating Right that have some unique qualities to them.

"There’s basically a bull market for corporate brands right now. Probably the most pronounced difference in sales increase between national brands and corporate brands that we’ve seen occurred in the fourth quarter and I think that will equal or accelerate in the first quarter and beyond."

In addition, Mr. Burd spoke confidently of Safeway’s ability to compete on price.

"Our view is that we can out run anybody in this business on cost reductions," he said. "We have a stronger balance sheet than anybody in this business. And there are a lot of people that we compete with that cannot keep up with us. And so people that can’t adjust the price if they have to be competitive will lose sales and market share. And that’s what adds to our confidence that we’re going to build sales as we move through the year."

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