Safeway Would Consider Smaller Formats to Meet Tesco, Burd Says

Safeway is prepared to open smaller-format stores if Tesco’s Fresh & Easy concept proves to be a winner with consumers, Steve Burd, chairman, president and chief executive officer, said yesterday at the Lehman Brothers Back-to-School Consumer Conference.

BOSTON — Safeway is prepared to open smaller-format stores if Tesco’s Fresh & Easy concept proves to be a winner with consumers, Steve Burd, chairman, president and chief executive officer, said yesterday at the Lehman Brothers Back-to-School Consumer Conference here. “If the smaller-store format works, we think we could do that, and probably do it more effectively [than Tesco], simply because we’re a well-known brand in the market,” he said. “To make that format really succeed, you’ve got to sell a lot of private label, and if you did a consumer survey about whose private label is better known in our operating areas — Tesco’s or Safeway’s or Vons’ — I think there would be no comparison.” Based on Tesco’s anticipated locations, Burd said Safeway is “pulling together traffic counts, demographic and ethnic information and income levels and preparing ourselves to defend our business.” In his remarks Burd also said Eating Right is outselling O Organics at the same point in its history; he also said the chain is offering a Web page that enables customers to determine how to compare their existing purchases with a potentially healthier diet.

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