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

On our top 1,000 lines availability has increased to 99% - and we're on the way to 100%

Once a recurring weakness in Safeway's customer offer, availability is rapidly becoming a source of competitive strength. This improvement has been driven by a new focus on our top-selling 1,000 lines, which account for around 30% of our sales and are the most important items in the typical shopping trolley.

In November we launched our 'availability initiative' and approached the suppliers of our top 1,000 lines for support. We set ourselves the goal of achieving 100% availability on these high volume lines, thereby increasing sales by up to 15%. This sales target was suggested by suppliers themselves and in many cases we have achieved it. With the help of our suppliers, we have invested heavily in extra stock, higher wastage and more staff hours instore. We have also given these high volume lines top priority in our depots and our stores.

The results to date include an increase in the availability of our top 1,000 lines by a good ten percentage points to a consistent level of around 99%. The number of out-of-stocks reported by stores fell from an average of 33 per store in mid-1999 to 22 in March 2000. External audits have confirmed this sharp improvement. Every six months The Grocer magazine reviews availability levels in the top five supermarkets and at Christmas 1999 it reported that over the period June-December, Safeway easily had the lowest number of missing items. Our target now is to improve still further on this level of performance and achieve 100% availability on every one of the top 1,000 lines every hour of every trading day.

Making use of the latest supply chain technology is obviously critical to further improvement and Safeway has been particularly active in this area. Our unique real time supply chain system uses Internet technologies to track the progress of products into and out of stores as it happens. Accessing this up-to-the-minute data enables suppliers, buyers, depots and stores to see exactly which products are moving off the shelves at any time in the trading day, making replenishment and forecasting much easier. This system, the first of its kind in the UK, has now been introduced to 44 stores with excellent results. It will be extended to a further 100 stores during the current year.

While pushing forward with the application of Internet technology to our supply chain, we have consolidated our reputation for innovation in the use of rail transport to supply our stores. In March 1999, with the help of a grant from the Scottish Office, we started making daily deliveries by rail of temperature-controlled products to fiv e Scottish stores. In the following 12 months we transported nearly 20,000 tonnes of products by rail, avoiding around 750,000 kilometres in road journeys. Thanks to a further grant from the Scottish Executive, we are about to extend our rail deliveries to six stores in north eastern Scotland via Inverness. We anticipate that our rail deliveries will in total save 1.75 million kilometres in road journeys in a full year. In recognition of our commitment to rail transport, the Institute of Logistics and Transport presented Safeway with an award for best environmental practice.