EMBRACING CHANGE

 
PASSION, PEOPLE, PRODUCT

 
PRODUCT AND PRICE

 
BEST AT FRESH

 
BEST AT AVAILABILITY

 
BEST AT CUSTOMER SERVICE

 
THE SAFEWAY BOARD

 
FINANCIAL REVIEW

 
THE ACCOUNTS

• Group profit & loss account
• Reconciliation of movements in shareholders' funds
• Balance sheets
• Cash flow statement
• Reconciliation of net cash flow to movement in net debt
• Analysis of movement in net debt during the year
• General accounting policies
• Notes to the accounts
• Report of the Directors
• Directors' responsibilities
• Report of the auditors
• Shareholder information
• Five year retail statistical summary
• Five year financial summary

OUR STORES

Our value offer now has much greater clarity and punch. Gone are the 'buy one, get one free' offers and other gimmicks which confused many customers and blurred the underlying value message. Instead we are offering customers big price cuts on selected, high volume products. In each store the products change every week, so there's always something new to interest our customers.

The speed with which we now organise and rotate these deals also makes it hard for our competitors to respond.

The deals typically cut the price of a product by up to 60%, and the increases in sales volumes have been enormous. In the last two months of the year, for example, in those stores where the following products were on offer, we sold:

• 7.6 million chicken breast fil l e t s , representing a total saving on the normal price to our customers of £5.2 million.
• 2.2 million bags of Tate and Lyle Silver Spoon granulated sugar, saving our customers £350,000.
• 1.8 million tins of Heinz Cream of Tomato soup, saving our customers £370,000.
• 9 million packets of Walkers Cheese Quavers saving our customers £780,000.

We are now leafleting 10 million homes with up to 30 deals every week. We are also supporting them instore with strong point of sale, big displays of product and, of course, by ensuring that they are always available.

The results speak for themselves. The overall cost of a typical Safeway shopping basket is lower than last year and we have gained 750,000 new customers. Wi t h support from our suppliers and drawing on the savings we have made in our spending on relationship marketing, we are now moving our strategy up a gear. Since the end of the year we have announced that we are ending our ABC loyalty card points scheme and reinvesting the savings in strengthening our deals programme. We have done this because we believe our customers now prefer deep cuts on popular products to loyalty points and vouchers. As well as concentrating even more promotional spend on our deals, we have increased our investment in this programme by £80 million to a total of £110 million. Last year, through our deals, we delivered total savings to our customers of £160 million. In the current year we expect these savings to top £500 million, worth over £70 per household shopping at Safeway.