Safeway, Inc. (SWY)

lemma (93.12) Submitted: 3/31/08 3:05 PM : Start Price: $29.03 SWY Score: -3.12

I can't believe I didn't think to call this when the stock was at $35. My husband works at Safeway, and the inefficiencies he witnesses are absurd. This might be long, but at least you'll know how your Safeway works!

There is almost no incentive to work hard or be efficient (and I've heard it's nearly impossible to get fired). Instead, all the emphasis is placed on the secret shopper program. If you shop at Safeway and get annoyed at constantly being asked if you need help finding anything, you should know that it's because you might be a secret shopper, and store management thinks the world will end if an employee "misses" a shop.

As a consumer, I don't like to shop at Safeway. The prices are much higher than other area grocery stores, and I don't think the secret shopper program actually improves customer service. They don't have a good selection of merchandise, either. The store by our house just started selling boogie boards. We live in the Pacific Northwest; it's cold and rainy here, not to mention a two-hour drive to the ocean. But does the store sell umbrellas? No. They sell boogie boards.

Safeway pharmacies lose business to drugstores with low-priced generics. About the lowest price you could expect to pay for meds at Safeway would be $19.99. If you can get the same thing for $4, you're saving almost $200 a year by going to Target, Walgreens, Wal-Mart or Costco.

If you wanted to determine how much bread to bake in a store, you would probably keep a spreadsheet of daily sales. You know what Safeway does? They look at the week's bread sales from five weeks ago. So if bread was on sale five weeks ago, or if there was a holiday and people were buying stuff for dinner, you're going to bake too much this week, and then throw it away -- because they don't have clearance racks for day-old goods.

I know this is all anecdotal information, but I think the waste and misdirection that employees and customers experience is indicative of the failure of management to focus on running the business well -- which includes finding, retaining and training good candidates for store and district management. With that intro, here is my favorite item: A display of Axe body spray near the pharmacy was aggravating an employee's asthma. After she complained to management several times, they came back with a solution: she could move to another store!

The thing that made me think "underperform" was that my husband had to call HR, and the phone line was *busy* for 35 minutes. What is this, Ma and Pa's Corner Market? Did Ma go to lunch and leave the phone off the hook? Seriously!

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