Store formats A our New stores

B The roll-out of New Safeway continues at an accelerating pace. During the year we refitted 73 stores including opening two new concept stores at Wimbledon and Woking. Our four New Safeway formats have now been launched at:

• St Katharine Docks – • Wimbledon – • Woking – superstore • Plymstock – megastore

In the first week of the current financial year, we opened two additional new stores 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 total selling space. We will continue to roll-out the new formats across our store portfolio, incorporating all of the operational lessons we have learnt up to now and adapting them to fit the local market. We have received a lot of very positive feedback from our customers and we have taken

14 Safeway plc Annual Report and Accounts 2002 Store formats

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

“Fresh to Go” We launched the first full prototype at Wimbledon in May 2001 and by the end of the year we had reformatted 66 of our 205 supermarkets. We have created the feeling Fernando Garcia-Valencia Jim Maclachlan Property and Stores Director of a larger store with more space in the Development Director fresh areas and have often introduced cross aisles to make it easier for customers to shop.

“Fresh to Go” superstores Wycombe and Woking were experimental, We launched the first prototype in Woking and having trialled them for 12 months, last May and so far we have reformatted we are satisfied that we have a profitable 38 of our 254 other superstores, including concept. The latest version of Fresco is in our new stores in Reddish and Carnforth. our reformatted Welwyn store and This format has introduced a new shopping incorporates the various operational lessons concept in the UK, combining retailing we have learnt. We have plans to put 30 and catering. The unique features of more Frescos into reformatted superstores “Fresh to Go” are an innovative range over the next year or so. Another feature of hot food and other meal solutions, of our “Fresh to Go” superstores is a new, delivered with enjoyment and a sense combined photoprocessing and dry of theatre by Safeway people. Equally cleaning service. This is highly visible to innovative thinking has gone into our customers, attractively presented and in-store restaurant, Café Fresco, where delivers a fast “while you shop” service. customers can now choose from a range Our goal this year is to achieve a further of pizzas, pasta, grilled food, salads and increase in the average basket size in desserts. Our first two Frescos at High these stores.

C note of constructive criticisms. Now that we are through the trial stage we are, as predicted, able to bring down the capital cost of the new formats, whilst still delivering dramatic improvements to our retail offer. We have emphasised from the beginning that our strategy for developing these concepts is flexible and that each element is transferable across the portfolio. Every store will have a unique offer which meets the needs of its customers locally. Some will have a full “Fresh to Go” offer while others will have elements of it which are both cost effective and appropriate to the store and the local catchment area. Early sales uplifts in fully-reformatted stores have been encouraging. The average sales increase from our refitted stores in the second half of the year was 10%, with fresh food sales increasing by 15% in those stores over the same period.

Looking at each format in more detail: Convenience stores Starting with St Katharine Docks, followed by High Street Kensington, we have

Annual Report and Accounts 2002 Safeway plc 15 megastores Last December we opened our first megastore at Plymstock, near Plymouth. This is a 58,000 square foot store, extended from the original 28,000 square foot superstore opened in 1996.

take a look inside

16 Safeway plc Annual Report and Accounts 2002 Store formats

taste

Megastores The key innovations are: entertainment. The success of our non- Last December we opened our first – A fusion of the best in superstore retailing food ranges in Plymstock has underlined megastore at Plymstock, near Plymouth. This with the best of a department store format. the potential to develop sales of all these is a 58,000 square foot store, extended from products in reformatted superstores. – Developing the “Fresh to Go” concept by the original 28,000 square foot superstore combining it with a restaurant, browsing opened in 1996. Plymstock is by far the area and seating to create a central “Hub”. most innovative hypermarket in the UK and represents a quantum leap from the – Establishing range authority in selected traditional concept of this format developed non-food categories such as health and by in the 1960s. beauty, photography, homeware and home

17 Safeway plc Annual Report and Accounts 2002 save

These ranges are delivered through a price opened our second megastore at Anniesland, position which is competitive with the lowest Glasgow. The store, which has a sales area in the locality, reinforced by the now-familiar of 64,000 square feet, offers the same “power-aisle” and a weekly flyer tailor-made innovative range of products and services as for the store. Plymstock, together with a “power-aisle” and weekly flyer. Three more megastores – at Customer reaction to Plymstock has been Milton Keynes, Gamston and Rushden – will overwhelmingly enthusiastic and sales are up open during June 2002. by 75%. Since the end of the year we have

18 Safeway plc Annual Report and Accounts 2002 pamper

This is an area of tranquility and space in the centre of the store where customers can browse and experiment with testers. The cosmetics range includes brands from leading beauty houses and our in-store beautician is on hand to advise customers. Other features include a nail bar, soap bar and pharmacy.

Annual Report and Accounts 2002 Safeway plc 19 Store formats

browse

We stock the top 20 films and music CDs as well as a wide range of classical music and popular films, together with hundreds of magazine titles, the top 20 bestselling books and a wide range of cookery, fiction and popular autobiographies. Customers can also browse our range of televisions, videos, DVD players and cameras.

Annual Report and Accounts 2002 Safeway plc 20 Annual Report and Accounts 2002 Safeway plc 21