During the tough economic times, many consumers cut back on discretionary
purchases and traded down to less-expensive items when they went shopping.
Safeway Inc. was among the retailers that saw that behavior impact their bottom
line. But Safeway’s CEO Steve Burd said the company saw early signs last quarter
of shoppers loosening their frugal ways. The company reported its fourth-quarter
results Thursday and Burd discussed the issue during a conference call with
investors.
QUESTION: You mentioned there were some tentative signs during the third quarter
that people were getting back to at least somewhat normal buying patterns with
lattes and (other items). As we look at next year … do you think you could
actually see a scenario where gross margins could actually go up a little bit if
you got the right mix and sales picked up quite a bit?
RESPONSE: It’s not just trading up that could result in that. We have a lot
planned next year on the supply chain, which would be positive to gross margin.
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