We were one of the first publications to report last year that Pleasanton, California-based Safeway Stores, Inc. was developing a new, small-format (15,000 -to- 20,000 square feet) grocery store similar to Tesco's Fresh & Easy Neighborhood Market, which the San Francisco Bay Area headquartered supermarket chain plans to initially open in the San Jose area sometime this summer.
Tesco plans to open an initial 18 of its small-format, combination basic grocery/semi-upscale fresh foods and specialty grocery stores in the San Francisco Bay Area beginning in late 2008, or more likely in early 2009. A number of these 18 initial stores will be located in the South Bay Area, in San Jose and the surrounding communities.
Since we reported the Safeway small-format grocery store development story, we've been following Safeway's development process closely, doing research and talking to as many industry--and industry-affiliated--sources as we can. As a result we've learned some additional facts about the new small-format grocery stores likely to open in July or August, 2008
Small-format stores will likely open in July or August, 2008
First, based on information from our various sources, we believe the first of the four -to- five pilot Safeway small-format grocery stores will open in either July or August of this year in the San Jose area. Part of Safeway's reason for wanting to open the stores this summer, is so that the retailer can have the intial stores opened for a significant period of time prior to Tesco entering the market in either late 2008 or early 2009.
It was initially believed Tesco would open the first of its Bay Area Fresh & Easy stores this summer. However, Tesco says it won't open stores in the region until 2009. We still believe its possible Tesco will try to open a few Fresh & Easy markets in the Bay Area in late 2008. The first store location lease (of the 18 signed to date) the British retailer signed in the Bay Area was for an empty Albertsons supermarket building on Bird Avenue in the city of San Jose, which it will remodel into a Fresh & Easy Neighborhood Market store.
Safeway wants to have its small-format grocery stores open and doing business before Tesco's Fresh & Easy even comes to town, so to speak. By opening the first stores in July or August of this year, it could give Safeway anywhere from six months to close to a year of retail operations before the first key is even turned in a Fresh & Easy store door by Tesco in the Bay Area.
Safeway small-format grocery stores: A few snapshots
We don't have a complete picture of what the Safeway small-format grocery stores will look like in terms of design or overall product mix. However, based on conversations with sources and much analysis ,we do have some pieces of the puzzle filled out thus far.
In terms of design, we expect something fairly upscale inside and out. However, the stores aren't going to be super upscale. Rather, they will be attractive in terms of design but also somewhat utilitarian looking. They aren't designed for only high-end consumers.
In October, 2007 Anthony Gilmore, the former Northern California Region President for Whole Foods Market, Inc. resigned his position with the supernatural foods grocer to accept an executive position with Safeway Stores, at its corporate headquarters in the East Bay Area city of Pleasanton. (Gilmore actually began his retail grocery career years ago with Safeway Stores, Inc.)
While leading Whole Foods' Northern California division, Gilmore completed an aggressive and varied new store opening program for the supernatural grocer in the region. His strength was in being able to organize and lead the development of "new generation" Whole Foods' stores, giving each of the new stores its own local flair.
For example, under Gilmore Whole Foods' Northern California built its biggest and most comprehensive food store in Campbell, California, which is located in the famed Silicon Valley, and is only a few miles from San Jose. This store, which is now called the Northern California flagship, is nearly 80,000 square feet. It's a double-story superstore, filled with numerous in- store dining venues, a wine bar, a mini day spa, and much more. The store also fits its location well, both in design and in its product mix.
Further, Gilmore lead the creation of what is arguably Whole Foods' most innovative store to date: its European-style market hall store in downtown Oakland, California. The store, which opened in October, 2007, is designed like a European food hall, yet contains all of the departments--and more--the supernatural grocer is famous for.
In addition, Gilmore pioneered the building of Whole Foods' lifestyle-oriented superstores as retail anchor stores for upscale multi-unit housing developments in the city of San Francisco.
Tesco plans to open an initial 18 of its small-format, combination basic grocery/semi-upscale fresh foods and specialty grocery stores in the San Francisco Bay Area beginning in late 2008, or more likely in early 2009. A number of these 18 initial stores will be located in the South Bay Area, in San Jose and the surrounding communities.
Since we reported the Safeway small-format grocery store development story, we've been following Safeway's development process closely, doing research and talking to as many industry--and industry-affiliated--sources as we can. As a result we've learned some additional facts about the new small-format grocery stores likely to open in July or August, 2008
Small-format stores will likely open in July or August, 2008
First, based on information from our various sources, we believe the first of the four -to- five pilot Safeway small-format grocery stores will open in either July or August of this year in the San Jose area. Part of Safeway's reason for wanting to open the stores this summer, is so that the retailer can have the intial stores opened for a significant period of time prior to Tesco entering the market in either late 2008 or early 2009.
It was initially believed Tesco would open the first of its Bay Area Fresh & Easy stores this summer. However, Tesco says it won't open stores in the region until 2009. We still believe its possible Tesco will try to open a few Fresh & Easy markets in the Bay Area in late 2008. The first store location lease (of the 18 signed to date) the British retailer signed in the Bay Area was for an empty Albertsons supermarket building on Bird Avenue in the city of San Jose, which it will remodel into a Fresh & Easy Neighborhood Market store.
Safeway wants to have its small-format grocery stores open and doing business before Tesco's Fresh & Easy even comes to town, so to speak. By opening the first stores in July or August of this year, it could give Safeway anywhere from six months to close to a year of retail operations before the first key is even turned in a Fresh & Easy store door by Tesco in the Bay Area.
Safeway small-format grocery stores: A few snapshots
We don't have a complete picture of what the Safeway small-format grocery stores will look like in terms of design or overall product mix. However, based on conversations with sources and much analysis ,we do have some pieces of the puzzle filled out thus far.
In terms of design, we expect something fairly upscale inside and out. However, the stores aren't going to be super upscale. Rather, they will be attractive in terms of design but also somewhat utilitarian looking. They aren't designed for only high-end consumers.
In October, 2007 Anthony Gilmore, the former Northern California Region President for Whole Foods Market, Inc. resigned his position with the supernatural foods grocer to accept an executive position with Safeway Stores, at its corporate headquarters in the East Bay Area city of Pleasanton. (Gilmore actually began his retail grocery career years ago with Safeway Stores, Inc.)
While leading Whole Foods' Northern California division, Gilmore completed an aggressive and varied new store opening program for the supernatural grocer in the region. His strength was in being able to organize and lead the development of "new generation" Whole Foods' stores, giving each of the new stores its own local flair.
For example, under Gilmore Whole Foods' Northern California built its biggest and most comprehensive food store in Campbell, California, which is located in the famed Silicon Valley, and is only a few miles from San Jose. This store, which is now called the Northern California flagship, is nearly 80,000 square feet. It's a double-story superstore, filled with numerous in- store dining venues, a wine bar, a mini day spa, and much more. The store also fits its location well, both in design and in its product mix.
Further, Gilmore lead the creation of what is arguably Whole Foods' most innovative store to date: its European-style market hall store in downtown Oakland, California. The store, which opened in October, 2007, is designed like a European food hall, yet contains all of the departments--and more--the supernatural grocer is famous for.
In addition, Gilmore pioneered the building of Whole Foods' lifestyle-oriented superstores as retail anchor stores for upscale multi-unit housing developments in the city of San Francisco.
For example, the newest San Francisco store, which is located in the hip, up-and-coming Potrero Hill neighborhood, is the ground floor retail anchor of a huge, high-end condominium development which is becoming a very popular place to live in the city. The store design is modern, like the condo project, but also incorporates the history of the neighborhood. Among the store's unique features are an indoor-outdoor wine bar and bistro which features a DJ who spins tunes for customers on weekend evenings.
Gilmore's charge in his position at Safeway is primarily retail format development and merchandising. He's been working on the chain's successful lifestyle format, including a project which involves creating a "second generation" lifestyle format for Safeway's supermarkets. Some of these "second generation" developments are already beginning to show up in the retailer's new lifestyle stores.
What we refer to as the "second generation" aspects include more upscale design and interior packages--colors, flooring, shelving, and the like--and added in-store features like the fresh nut bars and similar new in-store venues appearing in a number of the grocery chain's recently opened lifestyle supermarkets.
Gilmore also was brought on, in part, to work on the small-format grocery store project, both from a format design and product selection and merchandising standpoint. Expect to see his input in how the 15,000 -to- 20,000 square foot grocery markets look, the products sold in them, and how they reflect the communities (localism) they are in. We expect some unique and creative flourishes in the store's design and product selection.
Prepared foods to be central to the small-format stores
Safeway is nearing completion of a line of fresh, prepared foods which it will begin rolling out in its lifestyle stores soon. The prepared foods' line includes ready-to-heat and ready-to-eat entrees, side dishes and grab-and-go type foods. Some of the prepared foods' items will be under the retailer's O' Organics brand, others under its Eating Right healthy foods brand, and still others under one or more new brands. These prepared foods items will be sold in all of the grocer's lifestyle stores--as well as in the new, small-format grocery markets, we believe.
The grocer already has extensive prepared foods offerings--which it has grown dramatically over the last couple years--for sale in its lifestyle supermarkets. For example, it offers fresh soups, sandwiches, pizzas and other items under its Safeway signature brand. The grocer also offers prepared entrees and side dishes under various store brands, along with many other ready-to-eat and ready-to-eat items.
A little over a year ago, Safeway bought a restaurant near San Jose, in Redwood City, California, called Citrine New World Bistro. The grocer has been using the restaurant--which features organic and healthy dishes and even uses the name O' Organics (Safeway's store organic grocery brand) in the menu--to develop and test items with consumers as a way to develop its fresh, prepared foods items.
Gilmore's charge in his position at Safeway is primarily retail format development and merchandising. He's been working on the chain's successful lifestyle format, including a project which involves creating a "second generation" lifestyle format for Safeway's supermarkets. Some of these "second generation" developments are already beginning to show up in the retailer's new lifestyle stores.
What we refer to as the "second generation" aspects include more upscale design and interior packages--colors, flooring, shelving, and the like--and added in-store features like the fresh nut bars and similar new in-store venues appearing in a number of the grocery chain's recently opened lifestyle supermarkets.
Gilmore also was brought on, in part, to work on the small-format grocery store project, both from a format design and product selection and merchandising standpoint. Expect to see his input in how the 15,000 -to- 20,000 square foot grocery markets look, the products sold in them, and how they reflect the communities (localism) they are in. We expect some unique and creative flourishes in the store's design and product selection.
Prepared foods to be central to the small-format stores
Safeway is nearing completion of a line of fresh, prepared foods which it will begin rolling out in its lifestyle stores soon. The prepared foods' line includes ready-to-heat and ready-to-eat entrees, side dishes and grab-and-go type foods. Some of the prepared foods' items will be under the retailer's O' Organics brand, others under its Eating Right healthy foods brand, and still others under one or more new brands. These prepared foods items will be sold in all of the grocer's lifestyle stores--as well as in the new, small-format grocery markets, we believe.
The grocer already has extensive prepared foods offerings--which it has grown dramatically over the last couple years--for sale in its lifestyle supermarkets. For example, it offers fresh soups, sandwiches, pizzas and other items under its Safeway signature brand. The grocer also offers prepared entrees and side dishes under various store brands, along with many other ready-to-eat and ready-to-eat items.
A little over a year ago, Safeway bought a restaurant near San Jose, in Redwood City, California, called Citrine New World Bistro. The grocer has been using the restaurant--which features organic and healthy dishes and even uses the name O' Organics (Safeway's store organic grocery brand) in the menu--to develop and test items with consumers as a way to develop its fresh, prepared foods items.
Look for an extensive array of fresh, prepared food(including lots of organic) in the new small-format Safeway grocery stores. These items should range from basic, inexpensive items, to much higher-end gourmet items, which are being developed by professional chefs at the company-owned restaurant.
A limited assortment of discount groceries
In a conference call with supermarket industry analysts last week, Safeway CEO Steve Burd said because of the inflationary and recessionary nature of the U.S. economy, consumers are increasingly filling their shopping carts with cheaper groceries in his stores. He even said the company is seeing more shoppers buying generic groceries in Safeway-owned stores.
Safeway's stock tumbled to a 52-week low last week, even though the grocer's fourth-quarter profit met analysts expectations. Analysts--and Burd--attribute this decline in stock value to the current bad economic climate in the U.S., which like Burd argued to the analysts is causing middle-to-upper end consumers to buy more discount grocery products. During the conference call, Burd described the current rate of grocery inflation as "the highest I've seen in my 15 years as Safeway's chief executive."
We wouldn't be surprised to see Burd and company use the new, small-format stores to merchandise a limited assortment of private label and national branded basic grocery items along with the fresh, prepared foods and other offerings. We don't know this for a fact, and nobody at Safeway has gone on the record with us either confirming or denying this. Our view is based on discussions with numerous sources, as well as our own analysis.
Safeway has two strong selling value-positioned store grocery product brands. One is a low-end, near generic line, the other a mid-range brand. They also have Safeway Select, a premium, yet competitively-priced multi-category store brand, in addition to a number of other store brands.
In fact, these three--low-end, midrange and premium--store brands are the top market share sellers in many of their respective categories, such as various canned fruits and vegetables and other packaged goods. These product brands--like the Safeway retail brand--are strong in the Bay Area. Unlike Tesco's Fresh & Easy store brand, which will be new to the region, Safeway's brands have extremely strong equity with Bay Area consumers.
For example, the San Francisco Chronicle, the region's highest-circulation newspaper, runs a column in its food section every Wednesday in which it compares at least 10-12 grocery brands in a different grocery products category each week. Safeway's store brands (even the value brands) frequently place in the top three, beating out in many cases the top national brand in a given category, which sells for much more at retail than the Safeway store brand.
Safeway has a huge advantage over Tesco in this approach. First, the grocer knows the Northern California (and especially Bay Area) market inside-out. It's far-and-away the number one market share leader in the region. Second, the grocer has decades of market-specific scan data in its databases. This is an invaluable tool when choosing a limited basic grocery products selection for a store.
Finally, Safeway has over 20 years' of consumer data from its club card program. From a consumer-buying and behavior perspective, this information, combined with the market specific scan-data, can help the grocer not only choose the optimum limited-assortment basic grocery selection for its new, small-format stores, but also the club card data can guide the retailer in custom-tailoring the stores to each and every neighborhood.
This is powerful information that even the world's number-three retailer Tesco can't buy for any price. If they could, the retailer's Southern California stores would have a different basic grocery item product mix, and be tailored much better to the city's and neighborhoods they are located in.
What's in a name?
Lastly, and actually the most fun, is the question: What will Safeway name its small-format grocery stores? While we don't have any specific information from sources inside or outside of Safeway Stores, Inc. who can provide us with information credible enough for us to go on the record and give you the name Safeway's new, small-format grocery stores will go by, we are willing to go out on a limb and offer a potential or even probable name, based on three key factors we've identified and anlalyzed.
Those three factors are: First, Safeway Stores, Inc. likes the Safeway name and brand. All of its 271 stores in Northern California are branded Safeway, with the exception of a small division of warehouse stores called Pak 'n Sav. In addition, all of the grocery chain's stores in the Pacific Northwest, Arizona, Colorado and western Canada fly under the Safeway banner, as do the stores in the Washington D.C./Maryland/Virgina tri-state region.
All of the company's other banners--Vons, Pavillions, Dominicks, Randall's, Tom Thumb, Genuardi's and Carr's--were formerly independent chains which Safeway acquired, and as a result decided to keep the chain's names rather than change them to Safeway. The grocer sells its Safeway brand-named private label products, such as the Safeway Select, in all of these banner stores however.
The Safeway food retailing brand has strong consumer equity in Northern California, and especially in the Bay Area, where most of its stores are located, along with its corporate headquarters. As a result, we believe the grocery retailer is likely to use "Safeway" as part of the name for its new, small-format grocery stores when they open this summer.
Second, over the last four or five weeks we've floated a name for the small-format stores around to industry sources inside and outside of Safeway. We also have heard this name used by some Safeway suppliers, and others such as food brokers, who do regular business with Safeway at its corporate headquarters in Pleasanton.
While none of our sources (in the case of those outside Safeway) know for sure what the grocer will name the new, small-format stores, a number of them told us they've heard the name we put out there discussed among some serious industry people in Northern California. In terms of people inside Safeway (who didn't confirm or deny), the name we floated received some interesting responses. Not one of the insiders dismissed the potential name for the new, small-format stores we mentioned out of hand to us though.
All of this is purely anecdotal, and we aren't claiming otherwise. Rather, its merely one part of the three-part puzzle we are analyzing, along with a couple other factors. (Did you really think we would give you everything?)
The third piece of this three-part analysis puzzle involving the possible name for the small format, convenience-style grocery stores involves history. Many of our readers may not know this but there is a Safeway chain in the Middle Eastern country of Jordan. Safeway Jordan isn't owned by or affiliated with U.S.-based Safeway Stores, Inc.
However, there is an historic connection. U.S.-based Safeway Stores, Inc. once was an international food retailing company. Among it's international operations was Safeway plc. in the United Kingdom. Safeway Stores, Inc. USA sold UK-based Safeway a long time ago. And non- Safeway USA-affiliated Safeway plc. was recently acquired by Britain's Morrison's supermarket chain, which has nearly completed removing the Safeway banner from the stores in the UK.
Prior to selling UK-based Safeway plc. to Morrison's, the company owned Safeway Jordan and operated stores in that country and in Kuwait. In 2003, Safeway plc. sold its Jordan division to The Sultan Center (TSC), a Jordanian supplier and retailer of food, grocery, perishable and general merchandise items in the middle east. Jordan is a monarchy, so although it has a vibrant private sector, the ruling government family and business sectors are strongly tied-in together.
This is where the history gets interesting. Now, remember UK-based Safeway plc. was once long ago owned by USA-based Safeway, Inc. Safeway USA sold its UK operations to a group there who named it Safeway Plc. That group established Safeway Jordan, then sold the Jordan division to Jordanian-owned TSC.
TSC-owned Safeway Jordan operates three Safeway branded retail formats in that country. Those three retail grocery store formats are: Safeway service stores or supermarkets, which are similar to a western supermarket; Safeway Wholesale Center, which are a cash & carry-type format; and Safeway Express, which is a hybrid basic neighborhood grocery store/convenience store/food-service store.
Yes, you guessed it: we are suggesting (not stating as fact or saying we have any confirmation) there is a decent probability that Pleasanton, California-based Safeway Stores, Inc. will name its new, small format grocery stores, which will open this summer in the San Francisco Bay Area, Safeway Express.
There's an added caveat for Safeway Stores, Inc. in going with the Safeway Express name for its new, small-format grocery markets as well: Tesco, parent company of small-format Fresh & Easy Neighborhood Market, operates Tesco Express small format grocery stores throughout the UK and in other parts of Europe. These stores are the model from which Tesco created its Fresh & Easy grocery market format in the U.S. There are significant differences between the two formats--Tesco Express and Fresh & Easy--but also many similarities.
It would be ironic if Safeway names its new 15,000 square foot -to- 20,000 square foot grocery stores in the Bay Area--which will go head-to-head with Tesco's 10,000 square foot -to- 15,000 square foot Fresh & Easy grocery markets beginning at the end of this year or in early 2009--Safeway Express.
In many ways, using the Safeway Express name for the stores would set the stage for an all out premptive summer surprise by Safeway for Tesco's Fresh & Easy Neighborhood Market in the Bay Area and elsewhere in Northern California.
Note: If Safeway doesn't want to put its brand name (Safeway) on the small-format stores, or wants to use a fresher, more upscale natural and organic foods' sounding name, we think Citrine--like the company-owned restaurant--also might be a name in the running.
A limited assortment of discount groceries
In a conference call with supermarket industry analysts last week, Safeway CEO Steve Burd said because of the inflationary and recessionary nature of the U.S. economy, consumers are increasingly filling their shopping carts with cheaper groceries in his stores. He even said the company is seeing more shoppers buying generic groceries in Safeway-owned stores.
Safeway's stock tumbled to a 52-week low last week, even though the grocer's fourth-quarter profit met analysts expectations. Analysts--and Burd--attribute this decline in stock value to the current bad economic climate in the U.S., which like Burd argued to the analysts is causing middle-to-upper end consumers to buy more discount grocery products. During the conference call, Burd described the current rate of grocery inflation as "the highest I've seen in my 15 years as Safeway's chief executive."
We wouldn't be surprised to see Burd and company use the new, small-format stores to merchandise a limited assortment of private label and national branded basic grocery items along with the fresh, prepared foods and other offerings. We don't know this for a fact, and nobody at Safeway has gone on the record with us either confirming or denying this. Our view is based on discussions with numerous sources, as well as our own analysis.
Safeway has two strong selling value-positioned store grocery product brands. One is a low-end, near generic line, the other a mid-range brand. They also have Safeway Select, a premium, yet competitively-priced multi-category store brand, in addition to a number of other store brands.
In fact, these three--low-end, midrange and premium--store brands are the top market share sellers in many of their respective categories, such as various canned fruits and vegetables and other packaged goods. These product brands--like the Safeway retail brand--are strong in the Bay Area. Unlike Tesco's Fresh & Easy store brand, which will be new to the region, Safeway's brands have extremely strong equity with Bay Area consumers.
For example, the San Francisco Chronicle, the region's highest-circulation newspaper, runs a column in its food section every Wednesday in which it compares at least 10-12 grocery brands in a different grocery products category each week. Safeway's store brands (even the value brands) frequently place in the top three, beating out in many cases the top national brand in a given category, which sells for much more at retail than the Safeway store brand.
Safeway has a huge advantage over Tesco in this approach. First, the grocer knows the Northern California (and especially Bay Area) market inside-out. It's far-and-away the number one market share leader in the region. Second, the grocer has decades of market-specific scan data in its databases. This is an invaluable tool when choosing a limited basic grocery products selection for a store.
Finally, Safeway has over 20 years' of consumer data from its club card program. From a consumer-buying and behavior perspective, this information, combined with the market specific scan-data, can help the grocer not only choose the optimum limited-assortment basic grocery selection for its new, small-format stores, but also the club card data can guide the retailer in custom-tailoring the stores to each and every neighborhood.
This is powerful information that even the world's number-three retailer Tesco can't buy for any price. If they could, the retailer's Southern California stores would have a different basic grocery item product mix, and be tailored much better to the city's and neighborhoods they are located in.
What's in a name?
Lastly, and actually the most fun, is the question: What will Safeway name its small-format grocery stores? While we don't have any specific information from sources inside or outside of Safeway Stores, Inc. who can provide us with information credible enough for us to go on the record and give you the name Safeway's new, small-format grocery stores will go by, we are willing to go out on a limb and offer a potential or even probable name, based on three key factors we've identified and anlalyzed.
Those three factors are: First, Safeway Stores, Inc. likes the Safeway name and brand. All of its 271 stores in Northern California are branded Safeway, with the exception of a small division of warehouse stores called Pak 'n Sav. In addition, all of the grocery chain's stores in the Pacific Northwest, Arizona, Colorado and western Canada fly under the Safeway banner, as do the stores in the Washington D.C./Maryland/Virgina tri-state region.
All of the company's other banners--Vons, Pavillions, Dominicks, Randall's, Tom Thumb, Genuardi's and Carr's--were formerly independent chains which Safeway acquired, and as a result decided to keep the chain's names rather than change them to Safeway. The grocer sells its Safeway brand-named private label products, such as the Safeway Select, in all of these banner stores however.
The Safeway food retailing brand has strong consumer equity in Northern California, and especially in the Bay Area, where most of its stores are located, along with its corporate headquarters. As a result, we believe the grocery retailer is likely to use "Safeway" as part of the name for its new, small-format grocery stores when they open this summer.
Second, over the last four or five weeks we've floated a name for the small-format stores around to industry sources inside and outside of Safeway. We also have heard this name used by some Safeway suppliers, and others such as food brokers, who do regular business with Safeway at its corporate headquarters in Pleasanton.
While none of our sources (in the case of those outside Safeway) know for sure what the grocer will name the new, small-format stores, a number of them told us they've heard the name we put out there discussed among some serious industry people in Northern California. In terms of people inside Safeway (who didn't confirm or deny), the name we floated received some interesting responses. Not one of the insiders dismissed the potential name for the new, small-format stores we mentioned out of hand to us though.
All of this is purely anecdotal, and we aren't claiming otherwise. Rather, its merely one part of the three-part puzzle we are analyzing, along with a couple other factors. (Did you really think we would give you everything?)
The third piece of this three-part analysis puzzle involving the possible name for the small format, convenience-style grocery stores involves history. Many of our readers may not know this but there is a Safeway chain in the Middle Eastern country of Jordan. Safeway Jordan isn't owned by or affiliated with U.S.-based Safeway Stores, Inc.
However, there is an historic connection. U.S.-based Safeway Stores, Inc. once was an international food retailing company. Among it's international operations was Safeway plc. in the United Kingdom. Safeway Stores, Inc. USA sold UK-based Safeway a long time ago. And non- Safeway USA-affiliated Safeway plc. was recently acquired by Britain's Morrison's supermarket chain, which has nearly completed removing the Safeway banner from the stores in the UK.
Prior to selling UK-based Safeway plc. to Morrison's, the company owned Safeway Jordan and operated stores in that country and in Kuwait. In 2003, Safeway plc. sold its Jordan division to The Sultan Center (TSC), a Jordanian supplier and retailer of food, grocery, perishable and general merchandise items in the middle east. Jordan is a monarchy, so although it has a vibrant private sector, the ruling government family and business sectors are strongly tied-in together.
This is where the history gets interesting. Now, remember UK-based Safeway plc. was once long ago owned by USA-based Safeway, Inc. Safeway USA sold its UK operations to a group there who named it Safeway Plc. That group established Safeway Jordan, then sold the Jordan division to Jordanian-owned TSC.
TSC-owned Safeway Jordan operates three Safeway branded retail formats in that country. Those three retail grocery store formats are: Safeway service stores or supermarkets, which are similar to a western supermarket; Safeway Wholesale Center, which are a cash & carry-type format; and Safeway Express, which is a hybrid basic neighborhood grocery store/convenience store/food-service store.
Yes, you guessed it: we are suggesting (not stating as fact or saying we have any confirmation) there is a decent probability that Pleasanton, California-based Safeway Stores, Inc. will name its new, small format grocery stores, which will open this summer in the San Francisco Bay Area, Safeway Express.
There's an added caveat for Safeway Stores, Inc. in going with the Safeway Express name for its new, small-format grocery markets as well: Tesco, parent company of small-format Fresh & Easy Neighborhood Market, operates Tesco Express small format grocery stores throughout the UK and in other parts of Europe. These stores are the model from which Tesco created its Fresh & Easy grocery market format in the U.S. There are significant differences between the two formats--Tesco Express and Fresh & Easy--but also many similarities.
It would be ironic if Safeway names its new 15,000 square foot -to- 20,000 square foot grocery stores in the Bay Area--which will go head-to-head with Tesco's 10,000 square foot -to- 15,000 square foot Fresh & Easy grocery markets beginning at the end of this year or in early 2009--Safeway Express.
In many ways, using the Safeway Express name for the stores would set the stage for an all out premptive summer surprise by Safeway for Tesco's Fresh & Easy Neighborhood Market in the Bay Area and elsewhere in Northern California.
Note: If Safeway doesn't want to put its brand name (Safeway) on the small-format stores, or wants to use a fresher, more upscale natural and organic foods' sounding name, we think Citrine--like the company-owned restaurant--also might be a name in the running.
The tagline to the "Citrine" restaurant name, by the way is: 'Citrine: discover a new world of flavor.' Not too bad of a name for a chain of small-format grocery markets which would put an emphasis on fresh and natural, is it?
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