OAKLAND, Calif. -- Safeway will follow the same management strategies in 1994 that it used to launch its financial turnaround last year. That was the message delivered by Safeway's president and chief executive officer, Steven Burd, during the company's annual meeting here last week.
Burd told some 200 shareholders "1993 was a year of transition for Safeway, but it was also a year of significant progress. [Despite] the improvement, we think we still have some distance to go."
Safeway reversed negative financial trends in 1993 by following three basic strategies, which will continue, said Burd. The three strategies are reducing operating costs, building sales by becoming more price competitive and refocusing capital spending.
One of the big differences this year is that, after a year of significant reductions in capital expenditures, the company plans to step up its spending on new stores and remodels.
In 1993, Safeway cut its capital spending by nearly half: from $553 million to $290 million. The company opened 14 stores and remodeled 45. This year, Burd said, Safeway will spend at least $400 million on 15 to 20 new stores and 50 to 60 remodels.
"As we continue to improve our profit margins, as we are, we'll begin to accelerate our spending on capital," he said.
In a post-meeting interview, Burd told SN the expenditures will most likely be distributed equally across all markets in which Safeway operates.