April 23 Safeway Inc on Wednesday said
it plans to boost results by passing higher costs for meat,
produce and other staples on to shoppers at its U.S. grocery
stores, sending shares up 1.4 percent.
Safeway, the second-largest mainstream U.S. supermarket
operator, said first-quarter income was slightly below plan, in
part because it wanted to remain competitive by holding back on
price increases that would offset higher costs for produce, meat
and pharmacy products. That decision cut into margin in the
"We expect to pass along most of the inflation we are
experiencing" to shoppers in the second quarter, Robert Edwards,
Safeway's president and chief executive officer said in a
release. He did not specify how much prices would increase at
stores such as Safeway and Vons.
Safeway said its first-quarter loss from continuing
operations, net of tax, was $83.1 million, or 36 cents per
diluted share. A year earlier, the comparable profit was $59.7
million, or 25 cents per share.
Excluding unusual items, the latest quarter's income from
continuing operations, net of tax, was 6 cents per share.
Closely watched identical-store sales, excluding fuel, were
up 1.8 percent during the first quarter and are currently
running well above 2 percent, the company said.
Safeway has agreed to be bought by private equity firm
Cerberus Capital Management in a merger valued at $9.4 billion
that is expected to close in the fourth quarter. The deal will
combine Safeway with Cerberus' Albertsons chain to create a
dominant grocery franchise on the U.S. West Coast. It also
creates a grocery network of more than 2,400 stores and 250,000
(Reporting by Lisa Baertlein in Los Angeles; Editing by Lisa