Safeway Addresses Economy, Faces Controversies

PLEASANTON, Calif. — Safeway’s strategic planning for the next few years is based on the assumption the economy will improve gradually, Steve Burd (right), chairman and chief executive officer, told shareholders at the company’s annual meeting here.

The most important numbers to watch are not unemployment figures but the consumer confidence index, he said, “because as consumers become more confident, they will change their shopping habits and the economy will improve.”

The index is in the 60-70 range right now, Burd said, “but it needs to be at 90 or so for the economy to really improve.”

In response to a shareholder’s question on press reports that Safeway could be taken private, Burd responded by saying, “What all public companies say as standard policy — that we don’t comment on rumors.

“But what we tell our employees is that, while there are some things like rumors they can’t control, they can only control their own efforts, so we tell them to focus on their work and make sure they are valuable to the company, which should make them feel secure.”

Safeway was fighting fires on two separate fronts last week — ultimately resolving a case involving its suspension of an employee who stopped a male customer from kicking his pregnant girlfriend; and, separately, dealing with fallout from a joke the company’s general counsel made at the annual meeting.

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Ryan Young, a meat clerk at a store in Del Rey Oaks, in Northern California, was suspended without pay last month after an April 21 incident in which he stepped into a confrontation between the two customers. A Safeway spokeswoman was quoted as saying he was not suspended for coming to the woman’s aid but for other actions during the incident, which was caught on a store surveillance system and which Safeway said it was reviewing.

On Wednesday United Food and Commercial Workers Union Local 5 said Safeway reached an agreement through the union’s grievance process that resulted in Young’s reinstatement, including back pay and benefits.

Safeway officials could not be reached for comment.

Speaking with SN last week, a union spokesman said Safeway’s policy calls for employees to report any violent confrontations to management rather than opting to intervene, “which is a one-size-fits-all policy that makes no sense in this situation, where there was no recourse but for the employee to deal with it immediately.  However, it took Safeway a month to get off the dime and resolve this.”

On a separate front, Burd sent a letter of apology to Secretary of State Hillary Clinton and former Speaker of the House Nancy Pelosi for a joke the chain's general counsel made at last week's annual meeting, according to published reports.

The letter from Burd was in addition to a letter reportedly sent to both women by Robert Gordon, who made the joke.

According to the San Francisco Chronicle, Burd's letter read as follows: "You may have heard about the regrettable attempt at humor ... at our recent annual meeting. Mr. Gordon has sent a letter of apology directly to both of you. I simply wanted to express to you how sorry I am for what occurred. The joke was inappropriate, and I deeply regret this has obscured the respect we hold for you and for your service to our nation.

"We intend to do all we can to prevent something like this from happening in the future. Again, please accept my apology."

Burd's letter followed comments by George Miller, a Democratic congressman who represents the Bay Area, who led a delegation of local lawmakers that called for Safeway to apologize to Clinton and Pelosi among other "corrective steps" for the "shocking lack of respect, not only for two of the most important and respected people in our country but for all women."

In his statement, Gordon said: “I sincerely apologize if the comments offended anyone. As these comments have been interpreted, they are not a reflection of my personal beliefs or that of my employer. I understand how my comments have impacted others, and I hope they will accept my apology.”