Steve Burd, Safeway's chairman, president and CEO, said in the investor conference that its Lifestyle stores are "23% more productive, in terms of top-line sales growth, than similar remodels" the company has completed at similar costs-per-store in the past. "I think some people were concerned that as we moved through time we would move through the best projects and we would have deterioration in either sales or return on investment, but both of those have actually improved," Burd said.

Safeway plans to spend approximately $1.6 billion in capital expenditures in 2006 to complete the 20 to 25 new stores and the 280 remodeling jobs. That will follow a ramped-up expansion this year in which the company has been converting as many stores as possible to the Lifestyle format. Burd noted that Safeway has 146 construction completions scheduled in this year's fourth quarter.

Commenting on the capital expenditure plans, Burd said, "A year ago this time we piloted our approach to opening and remodeling stores. It's a more expensive process for launching new stores and remodeling stores than anything we've done in our history, but the reason we like doing it is that—whether it's a new store or a remodel—we feel that we have a window of time to establish increased sales, and we need to get at it."