PLEASANTON, Calif. — Safeway here said customers accounting for about 40% of its total sales have registered for its Just for U program, with about 25% of those customers actually using the digital program on a regular basis.
The company said Just for U, which offers personalized offers to customers, has between 1.1 million and 1.2 million regular users.
Steve Burd, chairman and chief executive officer, said the effect of the program is motivational. “It causes people to come to the store more often and to buy more when they are there.
“We know from our history of loyalty card data that people shop multiple channels. By personalizing the pricing with Just for U, it gives customers an opportunity to consolidate more of their business with us and pay no more — in fact, more often than not, they pay less.
“The personalized deals mean people devote more of their spend with us.”
Read more: Safeway Q3 Sales Dip on Genuardi's Sale
John Heinbockel, managing director at Guggenheim Securities, New York, said he has a favorable outlook for Safeway in the near term because of the maturation of Just for U, along with the return of inflation, ongoing challenges at Supervalu and ongoing expense controls.
For the third quarter, which ended Sept. 8, Safeway saw earnings rise and sales decline following the disposition of its Genuardi’s operation in the Philadelphia area and a lower Canadian exchange rate.
Safeway sold 16 Genuardi’s units and closed one during the quarter for a $49 million after-tax gain and cash proceeds of $111 million. The company said it expects to close the three remaining Genuardi’s stores in the fourth quarter for an estimated loss of $11 million.
Net income for the 12-week quarter jumped 20.6% to $157 million, while sales declined 0.2% to $10.1 billion and identical-store sales, excluding fuel, were 0.1% — softer than expected, the company said, due primarily to a decline in price inflation. For the year to date, net income rose 17.1% to $352.5 million, sales rose 1.4% to $30.4 billion and IDs rose 0.3%.
Burd said an increase in the number of generic prescription sales lowered total IDs by 0.7% during the quarter.
He said fourth-quarter ID sales, excluding fuel, are running at 1% — and at 1.4% in U.S. markets, where the Just for U program is in place — “with slightly improved volumes and higher inflation than in the third quarter.”
He said he expects IDs through the fourth quarter to be driven by increased Just for U activity; the rollout of Safeway’s fuel partnership loyalty program with Chevron, which will add close to 900 fuel stations; and the chain’s wellness initiative, which will launch in one or two unspecified markets during the quarter, though Burd declined to elaborate.
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