Analysts Reflect on Safeway

Mar 27, 2002

“Safeway is one of the most dominant supermarket chains in the country. Sales have slowed and people are worried that Wal-Mart is going to take over the entire industry. In reality, this is a company that’s going to grow into the mid-teens for sure. It’s trading at thirteen and a half times earnings,” Ross Margolies, Salomon Brothers Asset Management.

“Its annual earnings growth per share has been around 20 percent. That’s pretty decent compared to the industry average, which has been at 0.2 percent. It’s trading at a cheap P.E. of 18 times earnings,” says Elizabeth MacDonald, senior editor Forbes.

Moderator Comment: What are the keys to Safeway’s success and what will it take for the chain to take performance to a new and even higher level?

Safeway has its operations and logistics act together.
It does have a reputation, however, for curtailing the creativity of some of
its acquired companies such as Genuardi’s and Randall’s. [George
Anderson – Moderator

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