US grocery retailer Safeway has reported net income of $202.7m for the 16-week fourth quarter ended January 1, 2005. In the 17-week fourth quarter of 2003, Safeway reported a net loss of $695.9m.

Net income for the year ended 2004 was $560.2m compared to a loss of $169.8m for 2003.

“Our 2004 earnings were largely as expected, and we are very pleased that the cash generated by the business significantly exceeded expectations, allowing us to reduce debt by $1.1bn,” said Steve Burd, chairman, president and CEO.

“During the year, we were also hard at work reinventing our business, dramatically improving the quality of our produce and meat, expanding our offering of proprietary items in deli and food service and developing a store remodelling concept that highlights these changes,” he said.

Total sales increased to $11.4bn in the 16-week fourth quarter of 2004 compared to $11.0bn in the 17-week quarter of 2003, primarily as a result of the recovery from the strike and increased fuel sales.

For the year as a whole, sales increased only slightly to $35.8bn from $35.7bn in 2003, primarily because of a strike and because fiscal 2004 had one fewer week than fiscal 2003.