Store formats

14 Safeway plc Annual Report and Accounts 2002

The roll-out of New Safewaycontinues at an accelerating pace.During the year we refitted 73stores including opening twonew concept stores at Wimbledonand Woking. Our four New Safewayformats have now been launched at:

• St Katharine Docks – convenience store

• Wimbledon – supermarket• Woking – superstore• Plymstock – megastore

In the first week of the current financialyear, we opened two additional newstores in Reddish, Greater Manchester,and Carnforth, Lancashire.

Added to the work we did in 2000/1, we have now refitted and relaunched 121 stores, equivalent to 26% of our totalselling space. We will continue to roll-outthe new formats across our store portfolio,incorporating all of the operational lessonswe have learnt up to now and adaptingthem to fit the local market. We havereceived a lot of very positive feedbackfrom our customers and we have taken

our NewSafewaystores

B

A

Annual Report and Accounts 2002 Safeway plc 15

Store formats

note of constructive criticisms. Now thatwe are through the trial stage we are, aspredicted, able to bring down the capitalcost of the new formats, whilst stilldelivering dramatic improvements to ourretail offer.

We have emphasised from the beginningthat our strategy for developing theseconcepts is flexible and that each elementis transferable across the portfolio. Everystore will have a unique offer which meetsthe needs of its customers locally. Somewill have a full “Fresh to Go” offer whileothers will have elements of it which areboth cost effective and appropriate to thestore and the local catchment area.

Early sales uplifts in fully-reformatted stores have been encouraging. Theaverage sales increase from our refittedstores in the second half of the year was10%, with fresh food sales increasing by15% in those stores over the same period.

Looking at each format in more detail:Convenience storesStarting with St Katharine Docks, followedby High Street Kensington, we have

C

now fully refitted all but one of the 18convenience stores in our portfolio. All of these stores have achieved industry-leading standards of product presentation.

“Fresh to Go” supermarketsWe launched the first full prototype atWimbledon in May 2001 and by the end ofthe year we had reformatted 66 of our 205supermarkets. We have created the feelingof a larger store with more space in thefresh areas and have often introduced crossaisles to make it easier for customers to shop.

“Fresh to Go” superstoresWe launched the first prototype in Wokinglast May and so far we have reformatted38 of our 254 other superstores, includingour new stores in Reddish and Carnforth.This format has introduced a new shoppingconcept in the UK, combining retailing and catering. The unique features of“Fresh to Go” are an innovative range of hot food and other meal solutions,delivered with enjoyment and a sense of theatre by Safeway people. Equallyinnovative thinking has gone into our in-store restaurant, Café Fresco, wherecustomers can now choose from a rangeof pizzas, pasta, grilled food, salads anddesserts. Our first two Frescos at High

Fernando Garcia-ValenciaProperty andDevelopment Director

Jim MaclachlanStores Director

Wycombe and Woking were experimental,and having trialled them for 12 months,we are satisfied that we have a profitableconcept. The latest version of Fresco is inour reformatted Welwyn store andincorporates the various operational lessonswe have learnt. We have plans to put 30more Frescos into reformatted superstoresover the next year or so. Another featureof our “Fresh to Go” superstores is a new,combined photoprocessing and drycleaning service. This is highly visible tocustomers, attractively presented anddelivers a fast “while you shop” service.Our goal this year is to achieve a furtherincrease in the average basket size in these stores.

16 Safeway plc Annual Report and Accounts 2002

megastoresLast December we opened our first megastore at Plymstock, nearPlymouth. This is a 58,000 square foot store, extended from the original 28,000 square foot superstore opened in 1996.

take a look inside

Store formats

17 Safeway plc Annual Report and Accounts 2002

tasteMegastoresLast December we opened our firstmegastore at Plymstock, near Plymouth. Thisis a 58,000 square foot store, extended fromthe original 28,000 square foot superstoreopened in 1996. Plymstock is by far the most innovative hypermarket in the UK and represents a quantum leap from the traditional concept of this format developedby Carrefour in the 1960s.

The key innovations are:– A fusion of the best in superstore retailing

with the best of a department store format.

– Developing the “Fresh to Go” concept bycombining it with a restaurant, browsingarea and seating to create a central “Hub”.

– Establishing range authority in selectednon-food categories such as health andbeauty, photography, homeware and home

entertainment. The success of our non-food ranges in Plymstock has underlinedthe potential to develop sales of all theseproducts in reformatted superstores.

18 Safeway plc Annual Report and Accounts 2002

saveThese ranges are delivered through a priceposition which is competitive with the lowestin the locality, reinforced by the now-familiar“power-aisle” and a weekly flyer tailor-madefor the store.

Customer reaction to Plymstock has beenoverwhelmingly enthusiastic and sales are upby 75%. Since the end of the year we have

opened our second megastore at Anniesland,Glasgow. The store, which has a sales area of 64,000 square feet, offers the sameinnovative range of products and services asPlymstock, together with a “power-aisle”and weekly flyer. Three more megastores – atMilton Keynes, Gamston and Rushden – willopen during June 2002.

Annual Report and Accounts 2002 Safeway plc 19

pamperThis is an area of tranquility and space in the centre of the store where customers canbrowse and experiment with testers. Thecosmetics range includes brands fromleading beauty houses and our in-storebeautician is on hand to advise customers.Other features include a nail bar, soap barand pharmacy.

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Store formats

browseWe stock the top 20 films and music CDs aswell as a wide range of classical music andpopular films, together with hundreds ofmagazine titles, the top 20 bestselling booksand a wide range of cookery, fiction andpopular autobiographies. Customers can alsobrowse our range of televisions, videos, DVDplayers and cameras.

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