Safeway Reports Profits Down
Sonora, CA – Associated Press reports Safeway Inc. profits have slipped 6 percent in the fourth quarter as it paid more to stock its shelves.
The report blamed rising commodity and fuel prices, stating that grocers are struggling to meet the expectations of cost-conscious shoppers.
Safeway, based in Pleasanton, California owns the Sonora Safeway off of Sanguinetti Road (previously Pac N Save). The cost of goods sold by the company in the last three months of 2011 rose to $10 billion, from $9.2 billion over the same period a year ago. Gross profit was down to 26.7% of sales, compared with 28% a year ago.
The report stated that the company has been able to cut operating and administrative expenses down to 23.8% of sales, from 24.8% of sales a year ago.
Safeway bought back 43.3 million shares of its stock for $858.6 million, to reduce the number of outstanding shares. Safeway shares closed down $1.72, or 7.6 percent, at $20.95.
Safeway operates 1,678 stores in the U.S. and Canada including one in Sonora, one in Jackson and two in Modesto.