Module 1 SLP: Marketing Plan
Introduction Safeway is one of North America's largest food retailers, with its footprint located in Midwestern and mid-Atlantic regions of the United States and western Canada. The company also operates regional subsidiaries such as Vons Cos. (Southern California); Dominick's Finer Foods (Chicago); Carr-Gottstein Foods (Alaska); Genuardi's Family Markets (eastern U.S.) and Randall's Food Markets (Texas) (Biesada, 2010). Safeway offers pharmacies in more than 75% of its stores as well. Founded in 1914 in California by Sam Seelig, the chain grew to about 300 stores in California and Hawaii by 1926 before being bought out by Charles Merrill, one of Merrill Lynch's founders (Biesada, 2010). Over the years, the company grew through acquisition of local grocery store chains. In 2000, the company bought a majority stake in GroceryWorks.com, an interactive online grocer, completing the remainder from partner Tesco (in the United Kingdom) in 2006.
These days, Safeway is moving from heavy investment in stores to lowering prices, cutting costs, and generally freeing up more cash (Chang, 2010). Issue Analysis Though Safeway has been around for awhile, there are some external threats it's facing. There is, for one thing, increasing competition. Competition is coming not only from other grocery chains, but from combination "supercenters" (such as Wal-Mart and Target) as well. This latter ends up taking market share, simply because it combines convenience with lower price - people don't have to go to a department store and a grocery store to get errands completed. Furthermore, in the case of a company such as Wal-Mart, it offers fairly low prices. It's also running into competition from the discounters, such as Sam's Club (operated by Wal-Mart Stores Inc.) and Costco (DATAMONITOR: Safeway Inc., 2009). Furthermore, the recession has dampened spending - sales decreased 7% in 2009...