The
initial public offering price of Safeway stock was $226 in 1927 (). A five for one split in 1928 brought the price down to under $50 (). Over the next few years, Charles Merrill, with financing supplied by
Merrill Lynch, then began aggressively acquiring numerous regional
grocery store chains for Safeway in a
rollup strategy. Early acquisitions included significant parts of
Piggly Wiggly chain as part of the breakup of that company by Merrill Lynch and
Wall Street. Most transactions involved the swap of stock certificates, with little cash changing hands. Most acquired chains retained their own names until the mid-1930s. In 1929, there were rumors of a Safeway-
Kroger merger. In late 2022, 93 years later, this merger became another possibility with the announced merger of
Albertsons Companies and Kroger Co. The number of stores peaked at 3,400 in 1932, when expansion ground to a halt. The Great Depression had finally impacted the chain, which began to focus on cost control. In addition, numerous smaller grocery stores were being replaced with larger supermarket stores. By 1933, the chain ranked second in the grocery industry behind
The Great Atlantic & Pacific Tea Company and ahead of Kroger. In 1935, Safeway sold its nine stores in
Honolulu, Hawaii, "because of the inconvenience of proper supervision". Also in 1935, independent groceries in California convinced the California legislature to enact a progressive tax on chain stores. Before the act took effect, Safeway filed a petition to have the law put to a referendum. In 1936, the California electorate voted to repeal the law. In 1936, Safeway introduced a money back guarantee on meat.
International expansion The company expanded into
Canada in 1929 with 127 stores (which became
Canada Safeway Limited and which was sold to
Sobeys in 2013), into the
United Kingdom in 1962 (which became
Safeway plc), into
Australia in 1963 (which became
Safeway Australia), and into
West Germany in 1964. The company also has operations in
Saudi Arabia and
Kuwait in a licensing and management agreement with the
Tamimi Group during the 1980s. In 1981, it acquired 49% of Mexican retailer
Casa Ley. Safeway usually achieved international expansion by acquiring one or more small chains in a given country. It expanded into Saudi Arabia and Kuwait, however, through a joint venture. This initial nucleus of stores received Safeway systems and technology and then expanded organically. International chains acquired include:
1940s–1970s , built in 1962. This still-operating store keeps the Marina design, but the red letters have been replaced with the current logo. , August 2005 In 1941, Marion B. Skaggs retired from the Safeway board of directors. the firm also opened the first "marina-style" store on the
Marina in San Francisco. The exterior mosaic murals on the east side of the building were created by John Garth. The murals depict food being transported from the four corners of the globe. Garth created murals for three other Safeway stores. Hundreds of stores in this barrel-vaulted-roof style opened during the next decade. In 1961, the company sold its
New York operations to
Finast. In 1963, Safeway again opened stores in
Hawaii, having exited this market in 1934. It leased one store in Culver City to animator/filmmaker
Don Bluth, who used it as a theater until 1967. In 1969, Safeway entered the
Toronto market in Canada and the
Houston market in
Texas through opening new stores, rather than by acquisition. The firm ultimately failed against entrenched competition in both these markets. In 1977, Safeway management instituted a program to fight counterfeit $100 bills by, among other things, telling employees that bills that lacked the words "
In God We Trust" were counterfeit. Because Safeway had not sufficiently investigated the history of $100 bills, it was unaware that some bills still in circulation did not have the phrase. Eventually, an innocent shopper was incorrectly reported to Oakland, California, police for passing a "counterfeit" bill. He was arrested and strip-searched before Oakland police contacted the Treasury Department and realized the error. The 1981 jury verdict of joint and several liability for $45,000 against Safeway Stores and the City of Oakland was upheld in full by the
Supreme Court of California on December 26, 1986. In 1979,
Peter Magowan, son of Robert Magowan and grandson of Charles Merrill, was appointed chairman and CEO of Safeway. Magowan managed Safeway for the next 13 years – presiding over the dramatic decline of the firm in terms of store numbers
1980s: Takeover and sell-offs Following a
hostile takeover bid from
corporate raiders
Herbert and
Robert Haft, the chain was acquired by
Kohlberg Kravis Roberts (KKR) acting as a
white knight in 1986. With the assistance of KKR, the company was taken private and assumed tremendous debt. To pay off this debt, the company began selling off a large number of its operating divisions. The divested domestic divisions of Safeway proved to be problematic for almost all those who acquired them. Essentially every purchasing entity hit financial troubles and either went bankrupt or was later acquired. (Hy-Vee and Fareway are the exceptions with the locations they acquired, having made them work.) The international stores were more successful for their acquirers.
Safeway plc, the operator of the UK stores, was sold to
Argyll Foods, which itself was ultimately absorbed by
Morrisons in 2004. Safeway Australia was sold to the Australian-based
Woolworths Limited in 1985. Safeway sold its stores in Southern California, including those in established markets like
Los Angeles and
San Diego, to
the Vons Companies in 1988 in exchange for a 30 percent interest in the company. Safeway also scaled back its operations in
Fresno,
Modesto,
Stockton, and
Sacramento.
Save Mart Supermarkets purchased the few remaining Fresno Safeway stores in 1996. Many stores in the Eastern Division were also closed or sold in the 1987–1989 time frame, including many recent additions in the DelMarVa Eastern Shore area. Safeway's national presence was now reduced to several western states and Northern California, plus the Washington, D.C. area. Altogether, nearly half the 2,200 stores in the chain were sold.
Expansion in the 1990s The company was taken public again in 1990, with the Jordan stores sold to the Masri family in 1991. In December 2003, the Masri family sold it to
The Sultan Center of
Kuwait. The late 1990s and early 2000s once again saw Safeway rapidly expand into new territories under a variety of regional names. In 1997, Safeway bought out the rest of the Vons Companies, giving it Southern California stores once more. In 1998, Chicago-based
Dominick's Finer Foods was acquired from
Yucaipa Companies. While Safeway had stores in Alaska, in 1999 they bought
Carrs-Safeway, with the same year bringing the purchase of Houston-based
Randall's Food Markets, which also had stores in
Austin, Texas. Randalls also had stores in the Dallas-Fort Worth area through Randalls' other brand,
Tom Thumb, along with gourmet grocery store
Simon David. The purchase of Randalls also started the practice of Safeway-owned gas stations, as Randalls already had stations at their stores. In 2000, Safeway started grocery delivery operations and in 2001 acquired the family-owned
Genuardi's chain, with locations in
Pennsylvania,
New Jersey, and
Delaware. While Safeway also created the subsidiary
Blackhawk Network, a prepaid and payments network, a card-based financial solutions company, and a provider of third-party prepaid cards, around this time, Genuardi's would be the last grocery purchase Safeway would make. .
Lifestyle stores By the early 2000s, Safeway's expansion beyond the West Coast had been poorly received, citing Safeway's brands and West Coast-based buyers, with
Dominick's on the sale block, and Randalls and Genuardi's losing market share. To reinvigorate the flagging divisions, increase brand involvement, and to differentiate itself from its competitor, Safeway began a $100 million brand repositioning campaign labeled "Ingredients for life" in 2005. The launch included a redesigned logo, a new slogan "Ingredients for life" alongside a four-panel life icon to be used throughout stores and advertising, and a web application called "FoodFlex" to improve consumer nutrition. Many locations are being converted to the "Lifestyle" format. The new look was designed by Michigan-based PPC Design. In addition to the "inviting decor with warm ambiance and subdued lighting", the move required heavy redesign of store layout, new employee uniforms, sushi and olive bars, and the addition of in-store
Starbucks kiosks (with cupholders on grocery carts). The change also involved differentiating the company from competitors with promotions based on the company's extensive loyalty card database. This would be the design going forward for new and remodeled stores. At the end of 2004, there were 142 "Lifestyle" format stores in the United States and Canada, with plans to open or remodel another 300 stores with this type of theme the following year. "Lifestyle" format stores have seen significantly higher average weekly sales than its other stores. By the end of 2006, shares were up, proving this rebranding campaign had a major impact on sale figures. In 2011, Safeway signed an agreement with
UNFI, for the distribution to all of Safeway's banners in the United States for non-proprietary natural, organic and specialty products effective October 2011.
Decline and sale to Albertsons . The Genuardi's stores in
Wilmington, Delaware, were converted to the Safeway name in 2004 due to legal issues stemming from a union contract signed by the management of early Safeway stores in Delaware that closed in 1982. The current Safeway locations in Delaware are served by division offices in the
Baltimore–Washington metropolitan area, where Safeway has long been a major grocer. In 2012, the company dissolved the Genuardi's chain in the Philadelphia metro through a combination of store selloffs and closures.
Giant acquired 15 of the chain's stores and made an offer for a 16th which was instead sold to a local chain, McCaffrey's, as part of an antitrust settlement.
Weis also bought three Genuardi's locations. A number of unprofitable Genuardi's units also had closed in 2010 and 2011 as their leases expired. Also in 2012, Safeway's then-current CEO,
Steve Burd, agreed to build
Theranos blood-testing locations at 800 locations, at the cost of $350 million. The vision was to have blood test results done by checkout. Ultimately, the deal failed, and the company and CEO Burd suffered heavy financial losses as a result. In the years following the project termination, all of the spaces designed for Theranos' labs were either converted into
Quest Diagnostics drug testing clinics or pharmacy waiting rooms for vaccine customers, or the stores in whole were permanently closed. In 2013, it was announced that Cerberus Capital Management were exploring a deal for all or part of Safeway. On June 12, 2013,
Sobeys announced it would acquire Safeway's operations in Canada for
CAD$5.8 billion, subject to regulatory approval. The move will bolster its presence in Western Canada, where Safeway was predominant. Sobeys completed the sale five months later while keeping the Safeway banner on its newly acquired stores while changing private labels to be more inline with those used by its new parent. In October 2013, Safeway announced that it would close and sell its remaining
Dominick's stores in the Chicago area by early 2014. The announcement spurred its competitors to seek employees and desirable store locations they could purchase. One location would remain open in
Bannockburn, Illinois, until January 25, 2014. On February 19, 2014, Safeway began to explore selling itself. On March 6, 2014, longtime rival Albertsons, backed by
Cerberus Capital Management announced it would purchase Safeway for $9.4 billion in a deal expected to close in the 4th quarter of the year. Many of Safeway's private brands and IT systems were integrated and replaced Albertsons legacy equipment. As part of the purchase,
Blackhawk Network was spun off into an independent company. Blackhawk remained Safeway's sole gift card provider until 2021, when Albertsons switched to InComm for branded gift cards and network activation. Blackhawk continued to provide Safeway with store gift cards and store credit until January 5, 2023, at which point the remaining Blackhawk cards were taken offline (though cards activated prior to this point will not expire until 2037).
Safeway as a supermarket brand location. Safeway began rolling out this theme in 2018. On January 30, 2015, the merger between Safeway and Albertsons was finalized. As part of the merger,
Bellingham, Washington-headquartered grocery chain
Haggen announced it would buy 146 Vons, Albertsons, and Pavilions stores across Washington, Oregon, California, Nevada, and Arizona as part of anti-monopoly requirements following the merger. Some of the major metropolitan areas affected were Los Angeles, Portland, Phoenix, Tucson, San Diego, Bakersfield, Seattle, and Las Vegas. Other stores in the West Coast, along with the
Dallas-Fort Worth Metroplex market, also saw divestments. Following the purchase, Safeway and its remaining brands, Randalls, Tom Thumb, Vons, and Pavilions, along with their respective divisions, were integrated into the operations of Albertsons, and Safeway's proprietary food products were distributed in all of the Albertsons-Safeway banners, replacing Albertsons'
SuperValu branded products. All former Albertsons banners had their telephones and NCR
POS systems replaced with Safeway's Toshiba/IBM hardware. On January 11, 2016, it was announced that the three remaining Albertsons stores in Florida, located in
Largo,
Altamonte Springs and
Oakland Park, would be re-bannered as Safeway; this marks the first time that the Safeway brand would exist on a supermarket operation in Florida. These stores were short lived, as Albertsons later abandoned their Florida operations and sold the stores to
Publix in 2018. In November 2016, Safeway Inc. agreed to buy Andronico's remaining stores, which were based primarily in the
San Francisco Bay Area. When Andronico's closed as an independent company, it had a total of nine locations: three in Berkeley (Solano Avenue, Telegraph Avenue, and Shattuck Avenue); one in the Rancho Shopping Center in Los Altos; one on Irving Street San Francisco; one at the Stanford Shopping Center in
Palo Alto; one in Walnut Creek; one in Danville; and one in town of
San Anselmo in Marin County. The stores began closing in January 2017, with the North Berkeley, California store closing first. In February 2019, Safeway said that it was considering bringing back the Andronico's name. By February 2020, six Safeway stores were operating under the Andronico's Community Market label, with a seventh planned. Four Andronico’s stores in the Bay Area were renamed Safeway Community Market after the 2016 acquisition, though the flagship store in the Sunset District kept the Andronico’s name. Another store in Monterey opened in January 2019 as Andronico’s. In February 2020, four locations of Safeway Community Markets returned to the Andronico’s name - two in Berkeley, one in Los Altos, and one in San Anselmo. Today the stores operate as a special District within the Northern California division, which allows the management team to operate the stores more similarly to how Andronico's ran when it was an independent company. Beginning in 2018, Safeway and Albertsons began remodeling stores with a new theme that moved away from the "Lifestyle" decor first introduced in the early 2000s. The new theme features brighter colors and tiled backsplashes on department signage. The company has also begun to replace most of its lighting setup in favor of LEDs. Most older stores used
fluorescent tubes in the main aisles with
halogen spotlights in the departments or to accent display cases for a relaxed ambiance. The new standard is LED retrofit tubes for the old fluorescent fixtures, and completely replacing the halogen spot lamps with LED strips or office-style ceiling fixtures that focus on overall illumination instead of targeted, accented lighting. They also replaced lighting in employee areas and offices throughout 2021. In 2019, Safeway was ordered by a judge to pay a fine of $12 million after a
Santa Clara County, California, cashier was denied the
right to sit. California state law guarantees the right of workers to have "suitable seats". In August 2021, Safeway launched FreshPass, a paid subscription service that allows for free unlimited delivery/pickup and gives members exclusive discounts and offers. The program was launched with a refreshed mobile app that supports scan-and-pay shopping in select markets. Safeway also activated QR payments and digital receipts with the updated mobile app. The "Just for U" rewards program (commonly branded J4U), first launched in 2012, was simplified to "for u" as part of the FreshPass launch. Other Albertsons stores in various markets have rebranded as Safeway, including Denver and Seattle. In October 2022,
Albertsons and its competitor,
Kroger, which also operates
King Soopers and
City Market stores, announced a merger agreement. Following initial opposition, the two parent companies said they would sell 400+ stores to a competitor,
C&S Wholesale Grocers. Regardless, the planned merger has been challenged in court by a couple of states. In February 2024, Colorado Attorney General
Phil Weiser filed a lawsuit; he summarized consumer and worker opposition: the merger "would lead to stores closing, higher prices, fewer jobs, worse customer service, and less resilient supply chains.” ==Private brands==