PLEASANTON, Calif. — Safeway here plans to go chainwide by the end of the year with “Just for U,” its online program offering consumers personalized pricing based on their shopping history, Steve Burd, chairman, president and chief executive officer, told shareholders at the company's annual meeting here.
The program has been available in the chain's Hawaii stores since last summer and in Chicago and Northern California since the fall. Burd said an updated version of the program, which he referred to as “Just for U 2.0,” is already available in a small test market, which he did not name.
As Safeway focuses on “helping ourselves to grow sales by operating a truly different food store,” offering targeted marketing program tailored to loyal shoppers is one of Safeway's primary goals, Burd said. Other goals to differentiate itself include expanding private label and creating new products and services, he noted.
Private-label sales at Safeway outpaced national-brand sales in the fourth quarter of 2010 by 520 basis points, Burd told shareholders, with most of the growth coming from four brands: Eating Right, up 30%; Waterfront Bistro, up 22%; Safeway Select, a 15-year-old brand, up 4%; and Signature Cafe, up 4%.
He said the chain expects increased growth in its Refreshe line, which is expanding beyond water into carbonated soft drinks. He also said he expects strong sales from Snack Artists, a new line that features the first resealable snack packs.
In addition to offering gift cards for a wide variety of businesses through its Blackhawk division, Safeway has created Property and Development Centers to develop strip malls in which its stores are anchors, and Safeway Health, “which is just getting off the ground,” Burd said.
Safeway Health is based on what the chain has learned about health care costs and then sharing that information as a service to other companies, Burd explained. “We've flattened our health care costs for the past six years, and we expect to flatten costs in 2012, so we believe we have something to sell,” he noted.
Burd said he expects modest inflation of about 1% this year, “which most people think is a low estimate.”
In response to a question, Burd said it would take 25 Fresh & Easy Neighborhood Market stores and 10 Target P-fresh sections to equal the impact of one supermarket within a mile of an existing Safeway.
Burd told shareholders the company is raising its dividend slightly this year — to 21%, compared with 20% increases in the last few years — to an annualized level of 58 cents a share.
All directors were reelected during the meeting.