safeway

EXECUTIVE SUMMARY

Safeway was competing in imperfect competition. Because of the structure of monopolistic competition Safeway had to look for new and improving ways to be able to compete with new chains.
Another challenge for the firm was its old and outdated stores that needed major renovations. Because of negative financial situation Safeway was not in a position to be able to remodel all of its stores. My recommendation would be to start with most profitable stores in urban areas where the competition is the highest and then to move to less profitable stores.
Safeway was highly unionized and it didn’t have enough room to squeeze out enough cost savings to offset the higher cost/wage structure. To compete with nonunion shops, it had to either trim labor cost or jobs. In my opinion, Safeway’s management was not persuasive enough when it came to negotiations with unions, and because of that had to close many more stores than were planning.
In the pre-L...