Customer's Man

In Safeway stores, clerks often see a slight, spectacled shopper who isn't a regular customer but looks vaguely familiar. The shopper is Lingan Alan Warren, 60, the $386,000-a-year president of Safeway who spends much of his time checking up on his stores by shopping like any housewife. Says he: "I'm just a customer like anyone else. If I ever forget that, I'm through."

By putting himself in the customer's shoes--and giving the customer what he wants--Ling Warren has helped expand Safeway Stores Inc. into a grocery chain second only in dollar volume to the Great Atlantic & Pacific Tea Co. Last year Safeway rang up a net profit of $14.4 million, highest in its 24-year history, even though gross sales of $1 billion were down 7% from the year before because of a reduction in food prices and the number of Safeway stores. But Warren doesn't intend to let the gross stay down.

Last week, in his neat, green-walled office at Oakland, Calif., Warren announced a fiveyear, $200 million expansion program. Safeway will build 1,000 big new stores costing $200,000 apiece to replace some of its smaller, old-fashioned groceries. To keep the cash outlay for the expansion low, Safeway intends to sell the new stores as rapidly as they are built, to private investors, colleges and insurance companies, then lease them back. Safeway has used this sell-and-lease-back system on all its 2,166 stores, thus has comparatively little cash tied up in real estate.

Super Lesson. The big new stores will plug such hot-selling items as frozen foods and meats ready-packaged in Cellophane; they will be supermarkets in everything but name. Safeway doesn't like the term "supermarket"; it reminds the company of a bad mistake it made in the '30s. At that time, Safeway stuck stubbornly to the idea that supermarkets made housewives travel too far, that they preferred small neighborhood stores. While Safeway stuck to its small stores, A. & P. and other chains totted up their biggest business ever with supermarkets. Now Safeway hopes to make up for lost time.

To critics of big chains Ling Warren has a ready answer: mass-buying by large chains in the past half-century has reduced the housewife's food bill by 50%, mainly by cutting out middlemen's charges. Says Warren: "The oldtime cor ner grocer was usually the underprivileged slave of intermediary dealers."

Drumming Up Business. Largest stockholder in Safeway is Charles Merrill of Merrill Lynch, Pierce, Fenner & Beane. But Ling Warren has a free hand in tending store. A onetime lumberman and veteran chain-store operator before he became Safeway president 16 years ago, Warren now delegates enough authority to his staff to work only 35 hours a week.

He keeps in shape by playing golf (middle 80s), thumping away at home on a set of drums. His biggest current worry: a strike in 139 Safeway stores, where the A.F.L. Retail Grocery Clerks Union wants store managers to join up. The strike has already cost the company about $4,000,000. But Warren hopes his expansion program will make this up--and then some. By 1955, when the program is completed, Warren expects that Safeway will have doubled its present business.

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