Safeway is anticipating continued strong contributions from Lifestyle stores and product innovation to deliver sales growth of approximately 3.3% in 2007.
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The retailer said in a trading update that its strategy was to achieve sustainable 12-15% growth, and initiated earnings per share guidance of $1.90-2.00.
The company plans to spend approximately $1.7bn in cash capital expenditures in 2007, to complete approximately 25 new stores and to remodel approximately 275 stores. It expects to generate free cash flow in the range of $400m to $600m during 2007.
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Safeway chairman, president and CEO Steve Burd said: “We have made substantial improvements in our supermarket business since establishing our strategy to differentiate our offering in 2003.
“We have achieved significant improvements in our perishable offerings and executed our Lifestyle store programme in over 40% of our stores, with great results. We have also been working to establish new growth vehicles to ensure healthy long-term growth for our business.
Safeway reported the progress it has made with its Blackhawk Network gift card subsidiary.
“Blackhawk Network is a great example of how we plan to drive additional growth in years to come,” added Burd.
