Private Label Buyer

Safeway's Sales Up, Profits Down In Fourth Quarter

March 1, 2012
Pleasanton, Calif.-based Safeway had a tough fourth quarter as net income fell 6 percent to $215.6 million from $229.6 million in the same quarter of its prior fiscal year. Sales rose to $13.6 billion, up from $12.8 billion a year earlier.


Pleasanton, Calif.-based Safeway had a tough fourth quarter as net income fell 6 percent to $215.6 million from $229.6 million in the same quarter of its prior fiscal year. Sales rose to $13.6 billion, up from $12.8 billion a year earlier.
 
Private label provided a bit of a bright spot for the retailer.
 
“Our business continued to grow,” said Steve Burd, chairman, president and CEO. “As we move into 2012, our personalized marketing efforts and innovation in private label brands should contribute to our growth.”
 
Private label sales are increasing at a faster pace than national brands, Burd told analysts on a conference call. “Last year we launched a new brand, Open Nature and I think at the time we told investors we thought we could do maybe $85 million in the first year,” said Burd. “We ended up doing $104 million.”
 
In addition to Open Nature, O Organics saw sales of $426 million and Eating Right saw sales of $340 million.
 
“These are all brands playing king of in that health and wellness arena that we didn’t have six years ago,” Burd said. “The beauty about those brands is you can – with few exceptions – buy them only at Safeway. We’re now using our private label to build loyalty among our customers.”