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Safeway feels impact of generics

BY Doug Desjardins

PLEASANTON, Calif. Safeway reported another strong quarter but lower-than-expected same-store sales attributed in part to its pharmacies. The chain also confirmed it would start testing a new smaller-store format during the first half of the year.

The 1,743-store supermarket chain reported $301.1 million in earnings for its fourth quarter ended Dec. 29 with same-store sales increasing 4.4 percent but only 2.8 percent when gas sales were excluded. For the full year, Safeway generated a 15.7 percent increase in profits of $888 million and a 5.2 percent jump in total sales of $42.3 billion.

In a Feb. 21 earnings call with analysts, Safeway chief executive officer Steve Burd said pharmacy sales had an impact on sales that were positive but on the low end of expectations.

“Same-store sales were negatively impacted by an unprecedented switch over from branded to generic drugs,” said Burd. “And if you look at the other drug store chains, you’ve seen the same thing happening.”

Burd also confirmed that Safeway is preparing to test a smaller store format to combat the arrival of Tesco in its home state of California. “It’s going to be an experiment and, traditionally, we like to keep experiments close to the vest,” said Burd. “So we’re not releasing any information about the concept except to say we should have something out of the ground in the first half of the year.” Safeway is expected to open the first stores somewhere in Northern California near its corporate home.

Safeway also continued to expand in 2007, opening 20 new stores and remodeling 253 to its Lifestyle format.

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Patrican leaving Maxell

BY Doug Desjardins

FAIR LAWN, N.J. Industry veteran Dan Patrican is leaving Maxell Corp. of America next month “to pursue other opportunities.”

According to published reports, the company issued an internal memo on Feb. 19 that said Patrican would stay with Maxell until March 31 “to ensure a smooth transition.”

Patrican is currently VP of branded sales for Maxell and is on the company’s board of directors. He first joined Maxell in 1979 and left in 1986 only to return in 1997. In addition to serving on the Maxell board, he serves on the Board of Industry Leaders for the Consumer Electronics Association.

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Hepfinger named president, COO of Weis Markets

BY Michael Johnsen

SUNBURY, Pa. Weis Markets on Wednesday named David Hepfinger president and chief operating officer.

In his new role, Hepfinger will oversee the company’s day-to-day store operations, perishable and center store marketing, merchandising and procurement, pharmacy, distribution, human resources and store support services.

“Dave Hepfinger has a broad and varied background in food retailing which is particularly well-suited to our company,” stated Jonathan Weis, Weis Markets’ vice chairman. “He has a strong combination of operational and executive skills which will be essential to our company’s growth and success in the coming years.”

Hepfinger will report to Weis Markets’ chairman Robert Weis, vice chairman Jonathan Weis and Norman Rich, who will continue as chief executive officer.

Prior to joining Weis Markets, Hepfinger was senior vice president of retailing and administration at Price Chopper, a 116-store supermarket company based in Rotterdam, N.Y.

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