Safeway Profit Triples

In addition to explaining reasons for the considerably stronger performance, Safeway executives at Tuesday's conference call commented on plans for remodeling the chain's stores, part of a repositioning that was reported on in detail on GlobeSt.com/Retail in April. "We think that the third quarter is clearly going to be a stronger quarter for remodels," said Steve Burd, the company's chairman, president and CEO. "We will probably do something in the 70 to 80 store range for the second quarter and push that up to almost one a day in the third quarter." Safeway is remodeling its locations as "Lifestyle" stores, a key component of its repositioning, which also includes a $100 million rebranding campaign that will include new advertising, a new slogan, a new identity and other elements. The company opened seven new stores and completed 28 Lifestyle remodels in the first quarter. For the year, the company expects to spend approximately $1.4 billion in capital expenditures and open approximately 30 new Lifestyle stores and complete approximately 280 to 290 Lifestyle remodels. By year-end 2005, Safeway estimates that 25% of its store base will be in the Lifestyle format.

In reporting its first quarter results, Safeway pointed out that sales in the first quarter this year surpassed those of the first quarter last year in part because sales in last year's first quarter were reduced by a strike in Southern California that covered eight weeks of the 12-week quarter. Additionally, Easter holiday sales occurred in first quarter of 2005 compared to the second quarter of 2004. Safeway Inc. operates 1,801 stores in the US and Canada.