Business Strategy Case Study: Safeway

Safeway has come a long way since M.B. Skaggs purchased his first grocery store in Idaho from his father in 1915. According to Safeway.com, Skaggs initial strategy was to: “give his customers value and to expand by keeping a narrow profit margin.” (http://www.safeway.com/ShopStores/Our-Story.page)

This strategy proved fruitful, as by 1926 he had stores in 10 states and was opening up his 428th store! To this day, Safeway has continued to grow at an impressive rate and now has over 1300 stores across 19 states. With rapid growth comes the need to focus strategy. Safeway accomplished this by creating the following mission statement:

“We earn the loyalty of the people we serve by first anticipating, then fulfilling their needs with our superior-quality

The idea of a unique shopping experience that has a customer focused service and continuous innovation is once again an idea that is relative to each individual’s personal experiences with Safeway. But does their website support the concept of the mission statement? On the “Our story” page of Safeway’s website, they have a section that discusses Safeway today. The section states:

“All of our stores were founded around the philosophy of offering customers the products they wanted to buy at a fair price, with lots of tender, loving care. We still open our doors every day today with that in mind, and because of it, we run really great stores.” (http://www.safeway.com/ShopStores/Our-Story.page)

From reading this statement I can agree that Safeway is saying the right thing to support their mission statement for service. However, I can’t say the same thing when it comes to innovation. It’s interesting reading through the history of Safeway to see that founder M.B. Skaggs was definitely an innovator. According to Safeway’s website:

“In the 1930s Safeway introduced produce pricing by the pound, adding “sell by” dates on perishables to assure freshness, nutritional labeling, even some of the first parking lots.”

The website has an investors link that connects to a lot of financial information, including historical stock prices. The stock has had a lot of highs and lows over the years. The first recorded date on the chart provided was April 26th, 1990. At the time, the stock was trading at $2.77. The peak came on Dec. 29th, 2000 when share prices hit a high of $55.95. In 2012, share actually dropped below $14 before starting an eventual ascent to $35.10 at the last recorded trading day for Safeway stock, Jan. 29th 2015. After this, AB Acquisition LLC merged with Safeway and Safeway stock was de-listed from the New York Stock exchanges. Did Safeway generate long-term profitable growth for shareholders? That would depend on how you define long term. If you bought in 1990 or 2012, then the answer is yes, they did. However, if you bought shares in 2000, then Safeway failed at their actionable item in the mission statement. I would add though that I wasn’t able to find any information on the Safeway website discussing AB Acquisitions LLC shares. I would argue that currently, the website is not providing the information it should, to support the mission statement task of generating long-term profitable growth for