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April 5, 2005

USA: Safeway invests $100m in new brand positioning

US grocery retailer Safeway has said it plans to unveil a new brand re-positioning that focuses on high quality food and better customer service in a bid to win back customers.

US grocery retailer Safeway has said it plans to unveil a new brand re-positioning that focuses on high quality food and better customer service in a bid to win back customers.

The company said its “Ingredients for Life” strategy, the culmination of more than two years of reinvention and strategic development, aims to offer the highest quality produce, meat, bakery and deli products, proprietary brands, prepared meals and superior customer service to differentiate Safeway from other stores and attract consumers who are weary of shopping in multiple locations.

The US$100m campaign will be launched on 18 April with new advertising, a new slogan, a new identity, and other elements highlighting the new Safeway brand position.

“We are redefining the grocery shopping experience for our customers to serve their changing needs and priorities,” said chairman and CEO Steven Burd. “We are excited about the results from the implementation of this strategy, and see this campaign as a way to effectively communicate our consumer proposition.”

The company also announced preliminary sales results for the first quarter ended 26 March 2005. Total sales increased approximately 12% to $8.6bn in the first quarter of 2005 from $7.7bn in the first quarter of 2004. Sales in the first quarter of 2004 were impacted by a strike in southern California that covered eight weeks of a 12-week quarter.

Excluding sales at strike-affected stores, comparable store sales increased 4.4% and identical store sales increased 4.0%. Further excluding fuel sales, comparable store sales increased 3.2% and identical store sales increased 2.8%. Easter sales predominantly occurred in the last week of the first quarter of 2005, versus the second quarter in 2004, and had a beneficial impact on the full quarter. When adjusting for the holiday, non-fuel identical store sales increased 1.6%.

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