FINANCIAL COMPARISON OF ALBERTSON'S AND SAFEWAY STORES
Few Americans give more than a moment's thought to the supermarkets where most purchase their food. These well-stocked bastions of prepackaged and fresh foods offer conveniences well beyond merely providing food; drug stores, banks, florists and services as diverse as film processing and parcel shipping are also commonly found in many supermarkets. Increasingly, discount stores such as Target are selling food at supermarket prices, and gourmet supermarkets catering to those with high-end tastes--and budgets--or those consumers who want organically grown produce are also competing against traditional supermarkets. A recent and ongoing well-publicized labor dispute in the hotly contested Southern California market has brought the issue of supermarkets and their operations to the fore, but the details of these retailers that are so much a part of Americans' daily lives continue to elude most consumers. This research considers two supermarket chains, Albertson's and Safeway, and their relative financial positions.
The supermarket industry is a highly competitive and traditionally low-margin industry that can be heavily labor intensive. Inventories are perishable, and since most consumers consider the goods commodities, pricing is key to maintaining competitive edges. In addition, the industry has been marked in recent years by heavy computerization, including self-checkout, and the inventory management systems in most supermarkets are highly sophisticated and designed both to ensure against stockouts and overages to a highly refined level (Garry, 2003).
Increasingly supermarkets are facing competition from nontraditional sources, including discount stores. Target, for example, includes prepackaged and perishable groceries--including milk--in many of its stores. Kmart experimented with entire grocery stores inside its Super K stores, but with the company's bankruptcy f...