Who Does Safeway Own? – AnswerCatch

Safeway is one of the most ubiquitous and familiar names in grocery shopping across significant parts of the United States and Canada. With over 1,200 stores, the company has become synonymous with neighborhood supermarkets and one-stop shops for everything from fresh produce to pharmacy needs.

But who actually owns and operates the Safeway empire today? The story features some unexpected twists and turns, including acquisitions by prominent investment firms and proposed mergers with competitors like Kroger.

Let’s take a closer look at the origins, history, and current ownership status of Safeway.

Humble Beginnings and Early Success

Safeway was founded in 1915 by Marion Barton Skaggs in American Falls, Idaho. M.B. Skaggs started the company on the principle of offering customers quality groceries at low prices by keeping operational costs low. This model allowed the business to expand quickly across the Western United States.

By 1926, Safeway was incorporated with over 440 stores and $44 million in assets. The company then went public in 1929 and continued growing rapidly via acquisitions and new store openings.

By the 1950s, Safeway was the dominant grocery chain west of the Mississippi and third largest nationwide. The company pioneered several innovative approaches like premium private label products, frozen foods, and container produce shipping that helped cement its leadership position in the industry.

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Challenges and New Leadership in the Late 20th Century

In the 1970s and beyond, Safeway faced increased competition from national discount grocers like Walmart as well as regional supermarket chains. By the 1990s, Safeway was struggling with an unfocused strategy and inefficient, outdated operations.

To turn things around, Safeway brought in new CEO Steve Burd in 1993. Burd implemented a sweeping transformation strategy that included leveraging IT, instituting just-in-time inventory management, emphasizing higher-margin private labels, and reorganizing the company structure.

These changes allowed Safeway to once again achieve profitability and positive sales growth in the late 1990s and early 2000s. The company expanded into eastern U.S. markets and also branched out into adjacent businesses like gas stations and gift cards.

Cerberus Capital Management Acquires Safeway in 2015

In 2013, privately held supermarket operator Albertsons, backed by an investor group led by Cerberus Capital Management, emerged as a potential buyer for all or part of Safeway. After some initial challenges, Cerberus Capital completed the purchase of Safeway in January 2015 for $9.4 billion. This provided Cerberus and Albertsons with an expanded national footprint of over 2,200 stores.

Cerberus Capital Management is an American private equity firm specializing in distressed investing. Cerberus has purchased struggling companies across various industries, including grocery chains like Albertsons and Shaw’s Supermarkets. Former U.S. Vice President Dan Quayle has been a prominent public face for Cerberus since joining in 1999.

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Kroger Proposes Acquisition of Albertsons/Safeway in 2022

In October 2022, Kroger announced plans to purchase Albertsons and its subsidiaries, including Safeway, in a deal estimated at $24.6 billion. This merger would create one of the largest supermarket operators in the United States, further consolidating an industry facing growth from discount chains and new competition from online grocery delivery services.

The acquisition still requires approval from regulators and Albertsons shareholders. Some objections have already been raised about the competitive implications of removing Albertsons as an alternative to industry juggernaut Kroger. If successful, the deal is expected to close in 2024.

Safeway’s Operations in Canada Sold to Sobeys

While Cerberus Capital gained ownership of Safeway’s US stores in 2015, the company’s Canadian division was sold separately to food retailer Sobeys for CAD$5.8 billion in 2013 (approximately US$5.7 billion at the time).

Sobeys retained the Safeway banner after the purchase but transitioned most of the stores to FreshCo and Sobeys branding by 2018. Empire Company, the parent firm of Sobeys, made significant investments into former Safeway locations to refresh and renovate the stores.

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Safeway Today: A Cash Cow for Albertsons/Cerberus

Under private ownership by Cerberus Capital Management, Safeway has largely continued operating as an autonomous subsidiary within the Albertsons portfolio. Many of Safeway’s original brands and store concepts remain, though some back-end consolidation with sibling Albertsons banners has occurred.

Safeway continues holding the #2 spot in market share for grocery stores in the western United States as of 2022. The company has around 1,200 locations, with a strong presence in NorCal and Colorado along with footholds back east. Safeway employs over 150,000 staff and brought in $3 billion in net income for 2020.

For Cerberus Capital Management, Safeway has represented an extremely lucrative investment, providing steady profits even amid broader economic uncertainty. The potential merger with Kroger would provide a large payday for Cerberus while also posing risks of diluting the unique Safeway sub-brand post-acquisition.

Safeway’s Legacy: Lasting Impact on the Grocery Industry

While the Safeway name is now controlled by equity firms, the company maintains an undeniable legacy as an innovator that fundamentally shaped the American supermarket industry.

Safeway’s early expansion and efficiency-focused business model made national grocery chains viable. The company was at the forefront of popularizing produce departments, premium private label products, just-in-time inventory management, and loyalty programs.

Elements of Safeway’s original “food and pharmacy under one roof” concept served as the blueprint for modern supermarket conveniences we now take for granted. Though facing challenges over the decades, at its peak Safeway made grocery shopping quicker, more affordable, and consumer-friendly for generations of Americans.

So while Wall Street boardrooms and investor battles now guide Safeway’s trajectory, the company’s founding vision lives on each day through the hometown shoppers browsing Safeway aisles across the nation.

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Frequently Asked Questions About Safeway

Below are answers to some common questions about Safeway’s history and business operations:

What other grocery store chains are owned by Albertsons?

Some other grocery store chains owned by Albertsons include:

Acme Markets
Tom Thumb Food Stores
Jewel-Osco
Shaw’s and Star Market
Randalls Food Markets
United Supermarkets
Pavilions
Haggen Food Grocery Stores

When was Safeway founded?

Safeway was founded in 1915 by Marion Barton Skaggs in American Falls, Idaho. The first store was called Skaggs Cash Grocery.

What is the history of Albertsons?

Albertsons was founded by Joe Albertson in 1939 with a single store in Boise, Idaho. It expanded across the Pacific Northwest and California over the following decades. Albertsons was purchased by a Cerberus Capital-led group in 2006, then merged with Safeway in 2015.

Does Kroger own Safeway?

As of 2022, Kroger does not own Safeway. Safeway is owned by Albertsons, though Kroger has proposed a merger agreement with Albertsons that would create a combined company including both Kroger and Albertsons/Safeway stores. This deal is still awaiting regulatory approval as of late 2022.

How many Safeway locations are there?

Currently Safeway has around 1,200 store locations, primarily in the western United States but with a presence across 34 states overall.

When did Cerberus Capital acquire Safeway?

Cerberus Capital Management completed its purchase of Safeway in January 2015 for $9.4 billion. This provided Cerberus with an expanded grocery portfolio under Albertsons.

Who was Safeway’s original founder?

Safeway was founded in 1915 by Marion Barton “M.B.” Skaggs in American Falls, Idaho. He started the grocery chain based on providing high quality foods at low prices.

In summary, Safeway has passed through several owners but traces back to humble beginnings in 1915. The company spearheaded innovations that transformed the grocery industry and retains a major market presence today, though its future ownership situation remains pending amid the proposed Kroger merger. Understanding Safeway’s history provides insight into the forces that shaped one of America’s iconic supermarket chains

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