US: Safeway sees profits boosted by cuts, pricing

By just-food.com | 5 December 2008

US supermarket group Safeway has maintained its guidance for fiscal 2009, predicting that its "aggressive cost reduction effort" and pricing initiatives will fuel growth.

During a conference it staged for analysts and investors yesterday (4 December) Safeway issued EPS guidance of US$2.34-2.44.

The company said profits would be driven by non-fuel ID sales growth in a range of 2-3%. The group has slashed prices in at its US stores in order to increase customer footfall in what it described as a "tough" economic environment.

Management also predicted that capital expenditure would total approximately $1.2bn, down from $1.6bn the previous year.

"We are focused on growing our business in this tough economic environment, as well as in the long run," said Steve Burd, chairman, president & CEO.

"With the freshest asset base in the supermarket industry, a differentiated offering, and ongoing investments in everyday price, we believe we are very well positioned to improve our sales momentum in 2009."