I can tell you where some of the shrinkage is coming from... major theft when the stores are busy. With so little staffing at peak times, baskets of groceries leave the store,
Canada was a profitable division and the earnings will be sadly missed! Perhaps Safeway could off the Vons division to increase the bottom line. The added benefit would be that backstage could eliminate many positions which would be a positive to net earnings.
Guess those were the shoppers that visited the stores the last few weeks and wondered why they have to waste 15 minutes of their life in a checkout line. With 3 check stands opened at mid day, one self check, one express and one full serve (but no bagger)!
I guess you don't get to shop in the stores much, as a consumer. Rather, you are in the stores after a major 'fire drill' when everything looks great and you have doubled the staff for the day!
If Safeway goes private, the company will be a much smaller, leaner and profitable company than it is today. Safeway will most likely shed Vons in SoCal and let go some other divisions, ultimately ending with about 900 stores.
Much dead weight will be shed from Pleasanton as nothing helpful for the stores has come from there in many years!
I'm wondering how much the Canadian divisions profit added to Safeway's bottom line. The way Nor Cal is being run today, it would appear that the bottom line profit for the company may come up short. Staffing in the stores is horrible, long lines, out of stocks (sale Turkeys), no service at the service counters, poor displays in the outer departments,( looking more like 'dump and run' ) . The message being, "don't shop here, even thou we spend millions on advertising and have lots of collage graduates backstage , we really don't want your business because we make all our profit when we buy the merchandise"!
I'm afraid those that will be cut are the bloated staff that occupy cubes backstage and maybe 75 to 100 vice-presidents!
It's hard to say, at this point it could be just a change in how earnings will be reported in the future. Distance the new CEO as far from Steve Burd operating style as possible, I'm not sure what Edwards experience in the food industry is, bit it can't be any less than Burd!
This company needs to be downsized to increase shareholder value, jettisoning all underperforming companies and cleaning up the bloated backstage help. Then, change the business model in the stores because cutting staffing levels every year isn't working. Remember, Steve Burd wanted to own the middle when he spent billions upgrading the stores and at the time, probably had 40% more labor than the stores have today!
Safeway is trimming help in the stores again, most likely to put a good spin on earnings going forward, A better solution, now that Canada will have earnings separated from continuing operations, start cutting the bloated backstage help. The stores are dealing with more paperwork from backstage......... than product that is sold!
It looks like lockup shares were accounted for in July when , at one point, the market cap doubled from 200 to 400 million.
Fresh new low today on very thin volume. The problem becomes, if the bids and the asks have no depth then a buy or sell of 1000 shares can blow through all available shares. This stock does not look like it is being supported by the underwriters or brokers. Only good news from the company on sales and profit or buyout by a bigger company will move this stock up.
It depends on the department, in produced soft fruit season is big dollars to stores the size of Alamo. Many stores start shifts at 2 am to allow all the produced to be worked before the help gets called to the check!
Safeway is in need of a closer look at what it takes to staff a store and if the current business model has overstretched with product that corporate has forced into the stores.
Safeway is overstaffed with young, college educated, analysts, that have no idea what it takes to perform the tasks that are given. it's easy for management to cut 2 or 3 hours from every department and go about their business, expecting everything to look normal.
The biggest fallacy is the 'show and tells'. corporate comes into 'perfect conditions' because triple the labor has been added for the day as well as added merchandisers. The 'white shirts' look around, pleased with the look and go on their way. Then it's back to normal conditions......understaffed!
Sentiment: Strong Sell
Safeway doesn't know what they want to do because the majority of the decision makers haven't got a clue on how a market operates. Spreadsheets and pivot tables produced by the 20 something college graduate that is charged with making changes in a store that they have never worked, Safeway has been slashing hours in the stores but never consider changing the business model. Labor is expensive, so why waste it on paperwork that is being generated by minions , backstage, that don't give a hoot for what goes on in the stores.
New programs that have the employees show attentiveness to customers and then have that ruined by 1 full serve check stand and 1 self check stand opened with 12 people waiting to be checked out!
Safeway is a sleek ship moving at 30 knots but is on fire. Just because momentum is carrying you forward , doesn't assume that everything is OK!