Earnings Preview: Safeway reports 3Q Thursday
NEW YORK -- Safeway Inc. may give investors a glimpse of how the supermarket chain's new loyalty program for shoppers is impacting sales when it reports its third-quarter results Thursday.
WHAT TO WATCH FOR: The Pleasanton, Calif.-based company, which operates Safeway, Vons, Dominick's and other chains, earlier this year introduced its "just for U" program, which offers personalized deals based on past purchases.
In the previous quarter, the company said expenses related to the roll out of program hurt its net income. But CEO Steve Burd said that the program will position Safeway to more nimbly fend off competitors, by tracking customer buying patterns and offering them deals with personal appeal.
WHY IT MATTERS: Safeway and other traditional supermarket chains are fighting to hold onto shoppers as big-box retailers such as Target Corp. and Wal-Mart Stores Inc. continue to expand their food offerings.
Personalized deal programs such as "just for U" are relatively new in the industry, but Safeway isn't the first to do it. The Kroger Co., the nation's biggest traditional supermarket operator, also has a loyalty program that offers shoppers discounts based on their purchase histories.
And Burd has noted that other competitors will likely adopt similar strategies in coming years.
WHAT'S EXPECTED: Analysts on average expect earnings of 43 cent per share on revenue of $10.24 billion.
LAST YEAR'S QUARTER: The company earned $130.2 million, or 38 cents per share, on revenue of $10.06 billion.