Safeway reports its first sales decline since 1992

Tuesday July 09, 2002

SAN FRANCISCO — Supermarket giant Safeway Inc. on Monday reported its first quarterly sales decline in more than nine years, prodding the grocer to lower its prices to lure back bargain-hunting shoppers and fend off increasingly popular discount merchants. 

Laying most of the blame on a listless economy, Pleasanton-based Safeway said its second-quarter “identical-store” sales — a key industry barometer — fell by 1.1 percent from the prior year. It marked Safeway’s first year-to-year drop in identical store sales in 37 quarters, dating back to the final three months of 1992. 

The identical-store yardstick measures sales at stores that had been open for at least a year and hadn’t been remodeled. Factoring in the sales from all 1,792 of its stores, Safeway’s revenue in the 12 weeks ended June 15 totaled $8.1 billion, a 1 percent increase from last year. 

Safeway earned $309.3 million in the second quarter, a slight increase from net income of $307.3 million at the same time last year. 

If not for a series of special accounting charges, Safeway said its second-quarter profit would have been $350.4 million, or 69 cents per share, a 2 percent decrease from the same time last year. 

Monday’s announcement wasn’t a surprise. Safeway warned its second quarter would be disappointing nearly a month ago, provoking the biggest one-day drop in the company’s stock since the 1980s.