retail news in context, analysis with attitude

Safeway Inc. said that it cannot estimate the financial impact from an almost two-month-long strike by workers in Southern California, but reported that excluding stores affected by the strike, sales increased 0.4 percent for the fourth quarter through November 29. Sales increased 0.9 percent excluding its Dominick's Finer Foods chain, which also has been in turmoil because of an aborted attempt to sell it because of labor issues.

Excluding the effect of fuel sales, same-store sales fell 0.8 percent excluding Dominick's, and declined 1.2 percent including Dominick's.
KC's View:
Can't? Or won't?

When was the last time that Safeway provided the investment community with any good news? Or, for that matter, its customers?

Safeway said yesterday that it intends to stay the course in dealing with the Southern California situation, and that it wants to get similar employee concessions next year when it deals with expiring labor contracts in its Northern California, Seattle, Denver and Washington, D.C. divisions.

To which we would ask: what concessions exactly has it managed to get to this point?

None that we're aware of.

All that is has to show at this point is an eight-week-old and ongoing strike in Southern California and a Chicago division that it tried to sell and couldn't because of a labor force that didn't capitulate.

No wonder that the UFCW seems to have targeted Safeway and its management as a prime target in Southern California. At the very least, talking about "similar concessions" seems a little, well, presumptuous.

Amazingly, one of the real bright spots for Safeway - at least creatively - seems to be its online business, which continues to expand. We are consistently impressed with the level of the communications that consumers receive from Safeway.com…they highlight the best of what the food business should be about, and actually make the shopper hungry…which is high praise.

We mention this because we don't want to be accused of being completely negative about Safeway. Of course, also to be fair, the online business is a partnership with the UK's Tesco.

Maybe there's a lesson here.