Safeway posted sales of $8.3 billion in the first quarter of 2014, representing an increase of 1%. The slight uptick in sales was primarily attributed to an identical-store sales (excluding fuel) increase of 1.8%, partly offset by lower fuel sales in 2014.
The identical-store sales (excluding fuel) increase of 1.8% consists of a 1% increase in price per item and a 0.8% increase in volume. Safeway's share of sales in all outlet channels increased slightly, and sales to its most loyal households improved during the quarter.
"We are working diligently to close the merger with Albertsons by the fourth quarter," stated Robert Edwards, Safeway president & CEO. "While sales met plan in the first quarter, income was slightly below plan, in part as a result of inflation in produce, meat and pharmacy that was not fully passed along for competitive reasons. In the second quarter of 2014, identical-stores sales are currently running well above 2%, and we expect to pass along most of the inflation we are experiencing. In addition, the direct and indirect cost initiatives we are implementing are expected to improve profitability in the second half of 2014."
Safeway continues to drive sales momentum through its center of store remodels, as well as merchandising premium, Hispanic and Asian products to meet local demographic needs, Edwards reported. "In addition, our sales of organic and natural products continue to grow at a rapid pace, with our private label brands O Organics and Open Nature growing approximately two times faster than the rest of the market."