Safeway to sell organics food line

Safeway has been developing partnerships in Asia and South America to buy its "O" organics line which has grown to 300 items since its 2006 launch. Safeway said it expects the line to reach US$300 million in sales for 2007, up from US$164 million last year.

The retailer will use revenue from the sale towards building 20 to 25 new Lifestyle stores and remodel from 250 to 255 stores. Safeway said it anticipates that strong contributions from Lifestyle stores and product innovation will deliver sales growth (excluding fuel) in a range of 3% to 3.2% for the year.

"Innovation has been, and will continue to be, the key to our success," said Steve Burd, chairman, president, and CEO. "We have developed highly successful programs to reduce costs, improve service, enhance the quality of products and the shopping environment, and have established new growth vehicles. We believe this will ensure our long-term growth."

The company also recently signed an agreement with food service distributor Sysco Corp. to sell the products to the foodservice segment. Safeway operates 1,738 stores in the United States and western Canada and had sales of US$40.2 billion in 2006.