PLEASANTON, Calif. — Safeway here said last week it has no immediate plans to expand its initial test of a new payment program that avoids bank fees, though it has reportedly received inquiries from other companies interested in offering similar programs.
The initiative — called Fast Forward — links Safeway’s loyalty cards to a shopper’s checking account, thereby avoiding bank fees on debit transactions. It was launched in February in the Sacramento, Calif., market as part of the chain’s gas rewards program.
Safeway said the program does not require customers to obtain another debit card nor even to produce an actual card. Instead, Fast Forward allows them simply to enter their phone number and a personal identification number at the checkout to qualify for gas discounts.
The company said it will be “many months” before Fast Forward might be expanded to other markets.
However, Safeway has already received requests from other retailers interested in adopting the technology and indicated it may be willing to share the information with them, Robert Edwards, Safeway’s new chairman and chief executive officer, said during last week’s annual meeting, shortly before which he formally took over leading the company from longtime CEO Steve Burd.
“We’ve been working for a number of years on payment technology that provides efficiency,” he told shareholders. “We’re embracing the technology that we can use throughout the system and making it available to partners who have expressed interest.
“When people think of innovation, they think of Silicon Valley. At Safeway we’re always looking for innovation and best practices.”
In separate remarks during the meeting, Edwards detailed previously announced plans for Safeway to try to boost its appeal to affluent customers at some locations by re-merchandising the Center Store sections differently.
The chain is already engaged in remodeling the Center Store to improve adjacencies “and to provide solutions rather than just stocking shelves,” he said.
However, tests at 14 stores with an upgraded merchandise mix “exceeded expectations,” Edwards said, prompting Safeway to identify 150 stores with a base of more premium customers — those with higher incomes and educations who have been less affected by the economic downturn.
Of the 270 center-store upgrades planned for this year, 76 have been designated as premium store.
The transition to Edwards’ as CEO was low-key, with Burd introducing his successor and urging him to “show us what you’ve got.”
At the end of the formal portion of the meeting — during which shareholders re-elected eight directors — Burd said he had met Edwards in 1978, when he was consulting on a project for the Santa Fe Pacific Co., where Edwards worked, “and I thought he was a real talent.”
They met again in 2004, he recalled, when Safeway was seeking a new chief financial officer. “I’m a financial guy myself,” Burd said, “which meant it was difficult to find a financial guy that met my standards.
“But Robert was that guy, and for the past nine years, I’ve started every day in his office, though I’m not sure why we didn’t meet in my office.
“There’s no more shareholder-friendly, more determined CEO than Robert, and I couldn’t be leaving the company in better hands.”
Edwards thanked Burd for his years of service, noting that the company’s stock had risen from $18.09 per share a year ago to $25.47 per share. His long-term objective, he said, is “to continue to produce attractive results that the stock market will reward.”
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