PLEASANTON, Calif. — Safeway here said yesterday it is in the midst of a "very aggressive" year-long cost-reduction effort that's expected to provide additional pricing flexibility and help the company achieve its earnings targets, even if demand softens further. The company's stock slid nearly 7% yesterday after a fourth-quarter earnings report in which profits declined and Steve Burd, chairman, president and chief executive officer, said consumer demand was weakening. The cost-cutting program was initiated in late October. Although he did not give any specifics during a conference call with analysts, Burd said the effort has several major components, some of which have already been introduced and others of which will follow through the year. Net income for the quarter, which ended Dec. 29, declined 2.2% to $301.1 million, which the company attributed to favorable tax items in 2006 that added 8 cents per share to the year-ago number. Sales for the quarter rose 6.8% to $13.4 billion, and comparable-store sales, excluding fuel, rose 2.8%. For the year, net income rose 2% to $888.4 million, while sales climbed 5.2% to $42.3 billion and comps, excluding fuel, increased 3.6%.
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