A "Lifestyle alternative"?

This morning Safeway announced earnings, I normally don't follow Safeway, but this article caught my attention.

I don't think of Safeway as a "Lifestyle alternative" and I tend to think that Safeway deciding that convenience and low prices aren't how most of their customers decide where to shop for groceries is a very bad idea. I don't know about you, but when I need a gallon of milk I don't think of it as a chance to define my lifestyle, I tend to think where would be the easiest, cheapest place to get a gallon of milk. Unfortunately, it seems the managers at Safeway have decided the answer to that question is quickly becoming Wal-Mart.

Oct. 18 (Bloomberg) -- Safeway Inc., the No. 3 U.S. grocer,said
third-quarter profit fell to $122.5 million. Net income dropped
to 27 cents a share from $159.2 million,or 35 cents, a year earlier, the
Pleasanton, California-based company said today in a statement distributed by
Business Wire.Sales rose to $8.95 billion from $8.34 billion.

Safeway boosted marketing with a $100 million advertisingcampaign,
its largest ever, to lure upscale customers fromsupermarkets including Whole
Foods Markets Inc. and keep discounters such as Wal-Mart Stores Inc. at bay.
Chief Executive Steve Burd is remodeling many of the stores to differentiate
Safeway from its larger peers Kroger Co. and Albertson's Inc.

``They are trying to position themselves as a lifestyle
alternative, not just about lowest prices or most convenient,''said
David Dietze, president of Summit, New Jersey-based PointView Financial
Services, which manages about $95 million,including Safeway shares. ``It
does give them something to hang their hat on. They are still fighting
vicious competition from Wal-Mart.''

-Josh Fineman via Bloomberg

Timothy Burger
timothyb(at)timothyburger.com