US retailer Safeway Inc has booked a decline in operating profit in the first half of the year.
For the 24 weeks ended 16 June, operating profits slid to $437m, an 11.9% decline on the prior-year period. The retailer blamed the dedcline on increased advertising spending and costs incurred during the launch of its U loyalty programme.
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Net earnings, however, climbed 14.4% to US$195.6m. Safeway attributed the increase to an $80.2m tax expense recorded in the first quarter of the previous year, which skewed comparisons.
Sales edged up 2.1% to $20.39bn in the period.
“We are encouraged to see that our volume trends are improving as inflation has eased, and we are pleased to see market share gains in the grocery channel and a slight gain in market share in all food-related channels,” said CEO Steve Burd. “We expect continued momentum as participation grows in our just for U loyalty program that is now available in all US divisions and as we enhance our fuel rewards programs and expand our health and wellness initiatives.”
Click here for just-food’s coverage from Safeway’s analyst call
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