MERGERS AND INTEGRATIONS

Safeway Studies Its BlueprintDespite years of consolidation, the supermarket industry is still very fragmented. And Safeway, Pleasanton, Calif., considers its skill at integrating merged companies a major asset as it participates in consolidation.Those are the views of Steven Burd, chairman, president and chief executive officer, who calls Safeway's integration expertise "a blueprint for new acquisitions."

Safeway Studies Its Blueprint

Despite years of consolidation, the supermarket industry is still very fragmented. And Safeway, Pleasanton, Calif., considers its skill at integrating merged companies a major asset as it participates in consolidation.

Those are the views of Steven Burd, chairman, president and chief executive officer, who calls Safeway's integration expertise "a blueprint for new acquisitions." Safeway has also learned best practices from acquired companies. Vons' loyalty-card expertise was a boost to Safeway's Club Card, which is now rolled out throughout the entire company, said David G. Weed, executive vice president and chief financial officer.

Safeway, which last year reached agreements to acquire Dominick's Supermarkets and Carr Gottstein Foods, is known for substantially improving the earnings before interest, taxes, depreciation and amortization of acquired companies.

Safeway's private-label program continues as a major growth opportunity, said Weed. "We have an outstanding private-label program," he said. "The Select line is now up to 850 stockkeeping units. We anticipate continued private-label growth, which will expand our gross margins."

Weed said another bright spot for the company is the achievement of competitive labor agreements. "We have a relationship with the UFCW where they understand how we communicate, which means an improved relationship."

This year Safeway plans to spend $1.2 billion on capital expenditures, Weed noted.