Safeway Chief: It’s the Economy Stupid

Discussion
May 23, 2003
George Anderson

By George Anderson


Seeking to reverse a decline in identical store sales after nine consecutive years of growth, Safeway plans to reduce prices to entice consumers into its stores while reducing promotions to boost profitability.


Identical store sales for the chain were off 2.3 percent.


Steve Burd, chairman, president and chief executive officer of Safeway, told attendees at the International Council of Shopping Centers convention in Las Vegas, the company’s performance was more about the economy than anything the competition is doing.


According to The Las Vegas Sun, Mr. Burd said, “The sluggish economy has a material effect on things people buy. People turn to low-cost and low-price vehicles — discounters. Declining sales correlate more with the recession than a step-up in competition.”


Moderator’s Comment: Is Steve Burd correct? Is Safeway
being more affected by the economy than the competition?


What seems to have eluded Mr. Burd (based on this article)
is the competition is doing business in the same economy as Safeway. They’re
just choosing to shop in stores other than those owned by Mr. Burd’s company.
[George
Anderson – Moderator
]

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