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Safeway’s new just for U loyalty program contributed to the grocer’s revenue and comp growth for the second quarter of 2012, while its costs – including costs to promote the program -- contributed to a drop in profits for the quarter.
"Identical-store sales, excluding fuel, increased 0.8 percent in the second quarter of 2012," said Steve Burd, chairman and CEO. "We are encouraged to see that our volume trends are improving as inflation has eased, and we are pleased to see market share gains in the grocery channel and a slight gain in market share in all food-related channels. We expect continued momentum as participation grows in our just for U loyalty program that is now available in all U.S. divisions and as we enhance our fuel rewards programs and expand our health and wellness initiatives."
Sales and other revenue increased 1.9 percent to $10.4 billion in the second quarter, up from $10.2 billion in last year. Net income for the quarter was $121.7 million, down from last year’s $146 million.
Safeway invested $219.2 million in capital expenditures in the second quarter of 2012, while opening one new Lifestyle store and completing one Lifestyle remodel. Safeway also closed 10 stores, including three Genuardi's stores sold during the quarter. For the year, Safeway expects to invest approximately $900 million in capital expenditures to open approximately 10 new Lifestyle stores, complete approximately 10 Lifestyle remodels, refurbish in-store pharmacies and develop properties through our wholly owned subsidiary, Property Development Centers LLC.
Safeway operates 1,666 stores in the United States and Canada.