PLEASANTON, Calif. — Safeway here said yesterday it plans to introduce three new growth vehicles to drive 2008 earnings: experimenting with a new store format, monetizing two of its proprietary product lines and leveraging its health care knowledge in a new initiative. Speaking at an investors conference, Steve Burd, chairman, president and chief executive officer, did not specify what the new format would be but said it will be “an experiment, not a launch.” Published reports earlier this week said the chain was seeking sites for stores of 20,000 square feet each in the San Jose area in Northern California. Burd said Safeway also plans to offer its O Organics and Eating Right product lines to other outlets, and another executive noted the chain has already developed a partnership with Sysco in Northern California to distribute products to the food-service channel. Burd said sales of the two product lines could approach $3 billion to $5 billion a year. The third growth vehicle would harness knowledge Safeway has accumulated over several years to reduce health care costs by encouraging people to alter individual behavior, Burd noted. He said two of the three new vehicles should make money in 2008, “and they could contribute as much as 10% to 12% of earnings per share over five years.”

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