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Safeway Mulls REIT for Canada: Report

PLEASANTON, Calif. — Safeway here is considering putting its Canadian assets into a real estate investment trust (REIT), according to reports.

The company told investors it was exploring the move as investors and analysts have been speculating about the potential sale of the division, which includes 222 stores, mostly in Western Canada, generating $6.6 billion in annual sales. Loblaw Cos., Canada’s largest traditional supermarket chain, recently unveiled plans to put about 35 million square feet of its real estate assets into a REIT, which it said would unlock value for shareholders.

In addition, Safeway projected companywide identical-store sales growth for 2013 in the range of 2% to 3%, excluding fuel, vs. a gain of 0.8% in 2012. It projected earning per share of $2.25 to $2.45, vs. net income from continuing operations of $2.27 per share in 2012.

Capital expenditures for 2013 are expected to be between $1 billion to $1.1 billion.

“We made progress in 2012 on a number of initiatives, which we believe helped achieve market share gains and positive volume in the U.S.,” said Steve Burd, chairman and chief executive officer. “As we move forward, Just for U, fuel partnerships with Chevron and ExxonMobil, innovation in-store and in private label, as well as growth in Blackhawk and PDC should drive continued positive momentum."

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