SPREADING GOODWILL ACROSS AMERICA

ELLIOT ZWIEBACH

PLEASANTON, Calif. -- Safeway here is marking its 75th anniversary by linking the community-based commitment of its founder to its community-based initiatives going forward.

According to Laree Renda, executive vice president, retail operations, Safeway has decided to leverage its size by providing a national overlay for its primary community projects, enhancing programs its divisions have developed over the years.

"Although we are one of the largest supermarket companies in North America, we began as a neighborhood business, and we believe we are still one today," Renda told SN. "Our customers see Safeway as 'their' store, and through that sense of ownership comes our responsibility and our commitment to serving their communities."

Renda said Safeway's commitment to local communities began with the company's small-town origins in American Falls, Idaho, where Marion Barton "M.B." Skaggs opened his first grocery store in 1915. Eleven years later Skaggs acquired the California company that formed the core of Safeway -- and Renda said she believes Safeway has continued to maintain a small-town link with its stores and customers even as it's grown progressively larger over the years.

Now Safeway is hoping to build on its history of service to the neighborhoods it serves with a new national focus, Renda said. "Through our national initiatives, we are able to leverage the company's size and fully utilize existing communication and promotional methods to reach millions of customers in an efficient and effective way with a unified message that clearly demonstrates our commitment to serving the community," she explained.

According to Debra Lambert, corporate director of public affairs, "We realized that, as a national company, we can make a significant impact to raise more money from all divisions together than we could on a region-by-region basis by utilizing the synergies of the entire company. We also believe the national perspective will allow us to leverage our size while allowing the divisions to work at the grassroots level doing what they do best.

"The programs the divisions have offered over the years have been based on relationships built up over time with local or regional organizations, and those will remain intact. But we'll take a national approach on key issues to trade on synergies among our divisions."

Safeway sees the role of the supermarket in the community as very broad-based, Lambert said, "because our business reaches a wide range of diverse communities that each has unique needs. So we stay in touch with each community because each one is individual, with its own needs and its own demographics."

According to Renda, "We are convinced that serving the community is not only a responsibility but it has also improved our financial results by providing a service to our customers and employees alike. Demonstrated support of the community is an issue of growing importance among shareholders, customers and employees, and we believe our employees appreciate the company's involvement in the community and that it builds positive employee morale."

Quick Response for Disaster Relief

Safeway had an unanticipated opportunity to demonstrate the power of its national potential following the Sept. 11 terrorist attacks when it raised $4.1 million -- a company record -- for Red Cross disaster relief, Lambert said.

Within hours of the attacks, Safeway had canisters set up at checkstands at all 1,759 stores in the United States and Canada, she said. In addition, the company programmed its point-of-sale payment system so customers could "round up" on their purchases by adding money to their bill that was automatically designated for donation to the relief effort.

Safeway also posted signs and ran ads encouraging employees and customers to support the relief effort, and it set up a program that matched $100,000 in donations, she pointed out.

"We had tremendous success because we were able to mobilize fast and to reach a cross section of consumers -- just a huge number of people -- and to get the store programs and computer systems in place quickly to implement the fund raising."

Asked if Safeway's approach to community giving has changed over the years, Lambert replied, "We've always felt it was a priority and a core element of our business. So it's always been present.

"But what's happening is, the needs of the communities we serve continue to grow. Unfortunately, there's a greater need than ever for education and hunger relief, and more people need those kinds of essential services. We just don't see that on the decline."

Safeway's community programs fall primarily into three categories:

Hunger relief -- Safeway's longest-running community-service commitment, dating back to M.B. Skaggs, whose operating slogan was: "Distribution without waste" -- words that appeared below the logo on early Safeway stores.

"Hunger relief is what Safeway is all about," Lambert said. "We focus on giving customers the products they desire and making sure nothing goes to waste, and that's always been very important for us throughout our history. We are the food source, so talking about 'distribution without waste' as a philosophy makes sense, particularly in terms of hunger relief."

All Safeway divisions are active in hunger relief, either through fund-raising efforts or by serving as collection centers for food donations, she said. In fact, Safeway was instrumental in establishing the Second Harvest food bank network, she noted.

"All divisions conduct hunger-relief programs and donate food on a regional basis, and that's a very significant thing for Safeway because we believe it truly does make a difference in our role as a supermarket company. And even though it's a national effort because all divisions participate, the approach is local, with each division using its own personality to address the local community."

For example, Safeway's northern California division works with the local ABC-TV affiliate to donate turkeys for Thanksgiving to local food banks, while in southern California, Vons Cos. has tied its efforts for the past two years to the Entertainment Industry Foundation -- a fund-raising organization established by the entertainment industry to support a variety of causes.

This year's EIF effort is headed by actor Jeff Bridges, while last year's campaign was headed by Bo Derek, "which attracted a lot of positive press attention," Lambert said.

The EIF program may be extended to Safeway's northern California division next year, she said.

"In addition, we may make fund raising for food banks part of a national effort next year. Right now, we've been concentrating on food collection, but next year we may seek to raise money and take the concept of supporting local food banks that we use in California and expand that idea on a national level because those models have been very good for us."

Health-related issues, with a strong emphasis on cancer awareness and prevention. Safeway raised nearly $1.5 million this year in programs designed to raise awareness of breast cancer and prostate cancer, Lambert said.

Safeway has been involved in helping to raise money to fight breast cancer for more than 10 years, "because it's an issue that touches the lives of our customers, our employees and their families," Lambert explained, "while our involvement with prostate cancer is new. But we felt we could make a difference by giving it the same visibility as breast cancer."

Safeway's national effort to fight breast cancer tied in with National Breast Cancer Awareness Month in October, with all stores displaying small pink ribbons at the point of sale that customers could purchase for $1 each.

Safeway raised approximately $700,000 through that effort this year, Lambert said, "and if not for the Red Cross campaign after Sept. 11, I believe the amount would have greatly exceeded $1 million," she added.

Safeway's national effort included point-of-sale materials designed by Safeway showing pictures of women of all ages and ethnic backgrounds "to draw attention to the fact breast cancer affects all women," Lambert explained.

Safeway also distributed free bookmarks to customers from the California Department of Health Services that listed three steps for early cancer detection -- an annual breast exam after age 40, an annual mammogram beginning at 40 and breast self-exams monthly.

In an overlay to the national campaign, Safeway divisions in northern and southern California worked with the health services department, which selected several stores in underserved, primarily Hispanic areas to get the word out about early detection, Lambert said. That program also promoted a toll-free phone number for women to call for information on mammogram services and how to contact health care providers, she added.

In addition, Safeway's Dominick's division in the Chicago area was involved with the YMe program that provides support and financial services to breast cancer survivors and their families, she added, while Safeway divisions in Washington, D.C., Denver and northern California contributed money and products to the annual Race for the Cure, "with more divisions scheduled to be involved next year," Lambert said.

In June Safeway launched its first-ever program for prostate cancer awareness after it was approached by CaPCure, an organization that funds research programs seeking a cure. "We felt we would have a good opportunity to communicate the ease of testing for prostate cancer, given our customer base," Lambert explained.

The program -- geared to Father's Day with the slogan, "Let's keep Dad in the game" -- involved educational outreach programs through Safeway pharmacies, including efforts encouraging men to talk to their health care providers and get tested early, Lambert explained. The program raised $750,000 through the sale of light blue ribbons at the checkstands, she pointed out, and while Safeway is satisfied with that amount, "we're looking to increase our contribution levels next year," she said.

Youth and family, with a focus on supporting educational efforts, including raising money for school programs and equipment, Lambert said.

Safeway's northern California division and Vons donated $21 million to schools in California, Nevada and Hawaii over the past two years under a program tied to eScrip, a Foster City, Calif.-based, electronic school fund-raising program with multiple merchant partners; each time participants use their club cards, Safeway donates a percentage of their purchases directly to the school of their choice.

Although other companies in the eScrip program offer similar donation plans, including Chevron, Eddie Bauer and Budget Rent-a-Car, 80% of the total contributions come from Safeway, Lambert noted. "We may consider expanding eScrip, but we haven't made a decision yet," she added.

Safeway's Eastern division offers a similar program, where customers can use their club cards to donate funds to schools for computer equipment; Dominick's offers "Be a Smart Shopper," a program that helps educate kids about good health and nutrition through store tours and outreach to local schools; and Randall's in Texas offers "Operation School Supplies for Children in Need," which enables customers to make contributions for school supplies for needy children.

In addition, Genuardi's Family Markets in Pennsylvania has a Community Cash-Back Program in which it rebates 1% of cash register receipts to schools or other nonprofit groups designated by customers -- a program that contributed nearly $2 million last year to 3,500 schools, churches, scout troops, senior citizen groups, and fire and rescue companies, Lambert said.

The Safeway Foundation

Besides Safeway's community programs, a major source of charitable giving comes from a series of foundations Safeway and its divisions have set up, including The Safeway Foundation, a nonprofit corporation that was established earlier this year to focus the company's charitable giving for its six core divisions under one umbrella, Lambert explained.

The foundation will be funded by employee contributions, plus vendor support and contributions from Safeway itself, with a board of directors guiding dispersal of funds to all operating regions.

In the past, the funds raised by the divisions were automatically donated to specific charities, but with the inception of The Safeway Foundation, money raised by employees will be dispersed by the foundation to charities designated by each division, Lambert explained.

Vons and Dominick's each has its own foundation that predate their acquisitions by Safeway, and those will remain separate "because each is well-established, well-funded and well-known to the public and employees," she said.

"We've also talked about establishing foundations for Randall's and Genuardi's to see what makes sense because each banner and identity is so important in its local markets."

Although it's not a prerequisite for the job, Safeway's store managers tend to become very involved in the local community, Lambert said, including working with nonprofit organizations or doing volunteer work, "and we encourage that," she said.

Store managers also support the community through product contributions to local youth groups, food banks, homeless shelters or senior citizen centers, Lambert added.

"Store managers see their role as one that connects with the community that shops in their stores. Not everyone does volunteer work but most are well-connected, and they understand the needs of the community that shops their stores. That's been part of the Safeway philosophy since the beginning," Lambert said.