Legal issues with Michael Jordan, a connection to the disgraced Elizabeth Holmes - and a
bear doing some shopping?
Keep watching for what you need to know before shopping at Safeway again.
In the 1920s, leading up to the Great Depression, consumer credit expanded exponentially in
the United States as the Fed aimed to increase lending, grow money circulation, and stimulate
the post-war economy.
As a result, consumers started to buy more goods than they could afford.
S.M.
Skaggs, a Baptist minister who owned a store in American Falls, Idaho, that would later
spawn the Safeway empire, was skeptical of consumer credit.
He believed it increased prices because grocers and storekeepers had to wait to get paid,
and it made customers overly dependent on those grocers and storekeepers.
Unlike other grocers at the time, Skaggs did not allow credit purchasing and customers
could only pay for goods in cash.
His philosophy apparently made an impression on his son, Marion Barton Skaggs, who later
bought his father's store and turned it into the first Safeway.
"Safeway!
Everything you want from a store and a little bit more!"
When Marion Skaggs paid $1,088 to buy his father's store, it turned out to be a wise
investment.
In 1921, Skaggs relocated to Portland, Oregon, and teamed up with his five brothers to help
manage the then growing chain of stores.
Their business strategy prioritized razor-thin profit margins coupled with low prices for
customers, which proved to be successful.
Skaggs practically doubled the size of his grocery chain when he merged with 322 Sam
Seelig Company stores that had recently been renamed in a contest.
"Safeway" won out.
This merger was orchestrated by Charles E. Merrill, the founder of brokerage firm Merrill
Lynch, who financially backed Safeway.
He played a crucial role in turning Safeway into the grocery store chain as it is today.
Mr. Skaggs led the business for eight years before handing over operations to Lingan A.
Warren in 1934.
Safeway is responsible for introducing numerous innovations in the grocery industry that many
likely take for granted today.
Safeway's founder, M.B.
Skaggs, believed customers should help themselves as much as possible instead of relying too
much on clerks.
This is how Safeway became an early promoter of the self-service business model.
Customers had easy access to items on shelves, which they put into baskets they picked up
at the front of the store.
Safeway was one of the first adopters of "sell by" dates in the '30s, which helped customers
know just how fresh their perishable goods were.
The chain also began pricing its produce by the pound, which was another fresh concept
at the time.
And according to the company's website, Safeway deserves credit for another convenience: making
some of the first parking lots.
According to The New York Times, one of its later innovations came about in the '70s when
it introduced unit pricing to help make it easier for customers to choose the "most economical"
products.
During the Great Depression, the New Negro Alliance, a Washington, D.C. based organization
was established in 1933 by Black writers, activists, and lawyers with the aim to further
Black employment via forms of action including boycotts and pickets.
According to BlackPast, quote, "it was the largest and most successful organization"
of its kind at the time to promote civil rights through direct action.
The New Negro Alliance acted swiftly when Sanitary Grocery Store, a former Safeway subsidiary,
opened a new store in 1936 in a predominantly Black neighborhood, yet refused to hire Black
employees.
The very next day, the civil rights group organized a picketing campaign.
While other businesses that were hit hard in the wake of the stock market crash recruited
Black workers, Sanitary Grocery Store resisted and successfully sought an injunction against
the New Negro Alliance.
The grocery store argued that the civil rights group couldn't picket their business because
none of the protestors were employees.
Lawyers at the organization, including Thurgood Marshall, took the case to the Supreme Court.
This resulted in the 1938 landmark decision of New Negro Alliance v. Sanitary Grocery
Co., which ruled that the organization was legally within its right to picket a business
even if the protestors weren't employed there.
Although Joe Albertson, the founder of the grocery store conglomerate Albertsons, officially
launched his business in 1939, his career in the supermarket industry started much earlier.
In 1930, he was working at an Idaho Safeway as a clerk, and later became a Safeway district
manager.
It was at this point in his career that he decided to go into business for himself and
create his own grocery store company.
He teamed up with Safeway director L.S.
Skaggs and Safeway accountant Tom Cuthbert, and Albertsons opened its first store in Boise,
Idaho.
Albertsons expressed similar values as Safeway, and grew to become a major competitor to Safeway,
earning more than $1 million during its first two years of operation.
In early 2014, Albertsons and Safeway announced that the private equity firm backing Albertsons,
Cerberus Capital Management, was planning to buy Safeway for $9.2 billion, a surprising
twist of fate since Safeway was the very grocery store that Albertsons' founder started his
career at.
In a statement, Safeway president and CEO Robert Edwards, who became president and CEO
of the newly merged company, said -
"We plan to be the favorite local supermarket in every community we serve."
The merger wasn't clear cut, however.
The Federal Trade Commission had to approve the merger to make sure the consolidation
wouldn't eliminate competition and turn the merged company into a monopoly.
Ultimately, the FTC approved the merger in early 2015 on the condition that the grocery
store chain sell 168 stores to its competitors in the grocery sector.
Grocery store workers have been one of the major groups hit hardest by the COVD-19 pandemic.
While grocery stores have implemented health and safety measures, as well as hazard pay,
for employees and customers, many Safeway workers have voiced concerns that the company's
efforts have fallen short.
"They could've started doing all this testing or whatnot to prevent people that were feeling
sick you know, from going inside and getting all of us sick."
At the start of the pandemic, Safeway implemented an additional $2 per hour for its employees,
However, employees said this increase didn't adequately make up for the daily risks they
faced as essential workers.
What's more, the grocery store chain ended the bonus pay in June 2020 even though the
pandemic persisted.
Employees also argued that the chain took too long to implement basic safety protections.
According to Bloomberg, Safeway failed to encourage employees to wear masks or gloves,
resulting in a lawsuit after an employee died from COVID-19.
The New York Post reported in early 2020 that Albertsons, the parent company of Safeway,
wouldn't be able to pay around $565 million in retirement accounts, impacting roughly
50,000 employees in the Washington, D.C., area.
The company's underfunded pension woes came right as the grocery chain was trying to raise
money via an initial public offering.
Meanwhile, that same year, Forbes reported that Albertsons was the only grocer that had
earned, quote, "a very high risk of default" rating from RapidRatings.
As Safeway and other grocers navigate difficult financial waters, dollar store chains like
Dollar General and Dollar Tree are reporting huge profit margins, according to The Washington
Post.
As prices rise at grocery stores because of inflation and the ongoing supply-chain crisis,
Americans are shopping more at dollar stores than regular grocers, a trend that could hurt
Safeway in the long term.
Grocery stores everywhere have been ramping up their online shopping and retail offerings
in recent years, and Safeway is no exception.
With the rise of the pandemic, more and more shoppers are turning to grocery delivery services,
but they're not all created equal, and Safeway's has a mixture of pros and cons.
"On delivery times alone our expert says -"
"Wal-Mart and Safeway have a lot to work on if they're trying to compete with Amazon."
Your options are to shop for items on their website or use the app to add groceries to
your cart and set up a delivery time.
Orders can err on the pricey side since Safeway charges a delivery fee of $9.95 and a service
fee of up to $4.95, though fees are reduced for larger orders.
The biggest knock against Safeway's delivery service is its app, which isn't user-friendly
or easy to navigate.
Perhaps one of the chain's most underrated offerings is its rotisserie chicken.
The chicken is actually quite sweet-tasting, distinguished by a hint of orange flavor that
is reminiscent of the orange chicken you might order at a Chinese restaurant.
The unconventional flavor profile might not be to everyone's taste, but assuming you're
looking for a chicken that goes against the grain, then Safeway's offering is probably
your best bet.
According to Consumer Reports, Safeway's chicken is healthier than some versions offered at
other stores.
Typically, rotisserie chickens are loaded with sodium, sugar, and processed ingredients,
but Safeway has comparatively less sodium.
Bonus: you can rest assured there's nothing foul about Safeway's fowl since each bird
is time-stamped.
In 2010, Safeway partnered with now-defunct blood-testing startup Theranos on a $400 million
deal that was supposed to help shoppers get faster and cheaper blood tests.
"We've made it possible to eliminate the tubes and tubes of blood that traditionally have
to be drawn from an arm."
The grocer built outpatient centers at more than 900 of its store locations, and Safeway
even hired more than two dozen phlebotomists in anticipation of a deal that never got off
the ground.
After the Wall Street Journal published an expose in 2015 that revealed the shortcomings
of the startup's technology, Safeway pulled out of the deal.
Former Safeway CEO Steven Burd went on to testify against disgraced ex-Theranos CEO
Elizabeth Holmes, who was charged with knowingly misleading investors, patients, and doctors
about the capabilities of her company's technology to make a profit.
According to CNBC, he swore Safeway did their due diligence before going into business with
Theranos, and they weren't the only retail chain to invest heavily in Theranos.
Walgreens likewise partnered with Theranos until the pharmacy store chain dissolved its
contract and sued the startup.
During the first summer of the pandemic, a black bear decided to go shopping at a Safeway
in Lake Tahoe.
A bold customer caught the bear on a cellphone video that shows the animal rummaging through
the produce section.
Unsurprisingly, the video went viral, skyrocketing the bear to fame overnight.
As a result, he was dubbed the "Safeway Bear."
When the California Department of Fish and Wildlife officials captured the bear later
that summer, they released him back into the wild.
Even though these incidents amused people under lockdown coast-to-coast, the story took
a dark turn a year later.
In August 2021, the roughly 15-year-old bear was shot at a campground near the Nevada border
after he repeatedly approached a family with kids.
The killing was considered justified because the family acted in self-defense.
In 2015, star athlete Michael Jordan took one of Safeway's subsidiaries at the time
to court.
Chicago-based Dominick's, used Jordan's name to promote a product in a 2009 ad without
permission.
The ad attempted to capitalize on the basketball player's induction into the Naismith Memorial
Basketball Hall of Fame to advertise the chain's steak in a special issue of Sports Illustrated.
According to ESPN, even though only two people used the coupon, the court still ruled the
supermarket chain had to pony up $8.9 million.
Despite the sky-high settlement, however, Jordan said he wasn't in it for the money.
In fact, he planned to donate the millions to charity, though he didn't specify which
one.
He said he hoped, quote, "the size of the monetary reward will deter others from using
someone else's identity and believe they will only pay a small penalty."
According to Bloomberg, Albertsons, the parent company of Safeway, is stepping up its e-commerce
game with short and snappy TikTok-style videos to lift the grocer's online sales and ad revenue.
In late 2021, it partnered with Firework, a live-streaming startup that will bring videos
to the retailer's website.
According to Supermarket News, the second-largest grocery store chain is also the first to host
videos on the Firework platform.
The videos turn social media users into customers, allowing them to interact directly with brands
and their products.
The partnership will also give Albertsons and Safeway the ability to track data about
customers and gain insight into their shopping habits.
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