Safeway Inc., under recent scrutiny regarding its ability to take care of its pension obligations and the possibility of rising labor costs, released clearer details Tuesday of its costs, according to Dow Jones.
The company's shares dropped Monday after a Credit Suisse analyst downgraded his rating on the grocery chain, suggesting that Safeway's multi-employer pension plans represented a $7 billion pre-tax unfunded liability.
Safeway says that its unfunded liability is roughly $1.88 billion, pre-tax, and that recent moves such as contribution increases have helped reduce that number over the past few years.
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The company also plans to further reduce the level of its unfunded liability through collective bargaining, and pushing for better market returns.
In the meantime, the company said its multi-employer pension plan contributions remain "a manageable issue."
Safeway's fourth-quarter earnings fell 6.1 percent, largely due to rising food costs; its share prices rose Tuesday.
Safeway operates 1,678 stores in the United States and Western Canada and had annual sales of $43.6 billion in 2011.
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