Why is Safeway So Expensive? (Top Reasons + Cheaper Alternatives)

Food prices have gone up 8.6 percent in the last year, while a 7.7% increase for specific items such as food and vegetables across many grocery chain stores.

The popular Safeway store is no exception.

Higher prices for products, merchandise, and services at Safeway result in even more costs for grocery shoppers. What makes Safeway a pricier choice for its customers?

Operation costs vary among many wholesale stores for a few reasons.

One of which is the memberships and overall fees at these massive stores such as Safeway, Walmart, and Target.

Many shoppers would consider these benefits, but does it justify the cost? We’ll look at one, in particular, Safeway, and find out why it is among the most expensive.

Generally speaking, Safeway is so expensive because their stores offer high quality organic products and unique private label brands. They also have in-home pharmacy and Starbucks café at all their locations.

Top 10 Reasons Why Safeway is So Expensive

Several factors make shopping at grocery and wholesale stores so expensive.

Consider the type of products, the partnerships with exclusive high-end brands, or the special services such as delivery.

These create additional expenses for companies that cause higher prices for consumers. Let’s look at the top 10 reasons why Safeway is so expensive.

1. Organic Products

Safeway is unique when it sells organic products. Their primary target is those willing to spend on pricey food items.

Organic foods are notoriously more expensive than other varieties. According to the Food and Agriculture Organization of the United Nations, organic foods are in short supply, and demand for high-quality products.

2. Unionized Employees

Not all warehouse club stores have unions, but Safeway certainly does. Workers that are part of a trade union have protections against various workplace issues such as better wages, safety, and even retirement.

A report by the Economic Policy Institute states that unionized employees are paid 11.2% more and have a much better opportunity for quality health care than their nonunionized peers.

3. Selection of Private Label Products

Part of Safeways inventory includes private label products. Safeway partners with exclusive brands, including Lucerne foods, Bel Air frozen foods, Busy Baker cookies, and Crown Colony spices. 

These private label items are marked up for Safeway to make a profit, resulting in higher prices. 

4. Customer Service Costs

A successful company must provide quality customer service and care. Safeway provides well-trained employees with customer service skills as part of their business.

The International Centre for Trade and Sustainable Development states that companies spend as much as 11% of their revenue on customer service-related expenses.

With that comes additional costs for the company as well as for consumers.

5. In-Home Pharmacy

Like many other chain stores, Safeway offers pharmaceutical services such as medical supplies, vaccines, and prescription drugs.

The costs to run a pharmacy include maintaining inventory and supplies, rent as well additional wages for qualified employees will all affect Safeway prices.

6. Frequent Sales and Discounts

One of the appeals of Safeway is its regular promotions offering sales and discounted prices on certain items.

However, companies often lose money this way and must make up the difference after. With constant sales at select times and dates often comes higher prices when sales are over.

7. Starbucks Partnership and Kiosk

It’s pretty convenient to get a quick cup of coffee as part of the shopping experience. Many large store chains offer in-house Starbucks stores for those looking for a caffeine fix.

While Safeway stores have a Starbucks cafe within their stores, the operational costs do affect their product prices overall.

Running a name-brand cafe includes operating expenses such as product and distribution costs and general administrative expenses. 

8. Price-Matching is Not Offered

Matching item prices with other competing stores can attract customers and boost their satisfaction.

However, their price matching policy states they do not offer this benefit. This includes items such as produce, bakery goods, and any products.

While Safeway does offer brand exclusivity and quality products, price matching is not included.

Unlike other stores like Walmart and Target that do price-matching, Safeway follows its pricing policy.

9. Delivery Costs

The Safeway Delivery Program offers a contract-free service for purchases made through their website or app.

While convenient for last-minute shopping or even late-night cravings, the expenses for the company are higher when providing hauling services for customers.

According to the PennState Extension study, the “difficulty with providing a transport and or delivery service is that there are additional expenses and many working parts which require additional management.”

10. “Just For U” Rewards Program

I often wonder how you can save money shopping at Safeway stores? They do offer a rewards program called Just For U.

This is a rewards card that offers exclusive discounts on select items for members.

The issue is that not all stores provide access to the Just For U rewards card, and without it shopping at Safeway is more pricey.

What is Safeway?

This San Francisco Bay-based grocery store is the second largest in the U.S, with over 1300 stores.

Safeway offers its brand of food products such as produce and bakery items. Their membership provides discounted prices on select items for anyone with a Safeway Club card.

Every warehouse store chain provides its unique services and products, which alter their overall prices.

When you have a long list of items to purchase, buying in bulk can make sense if you can save money at one of these warehouse clubs.

Yet, most consumers find buying at their stores considerably more expensive than competing stores such as Target and Walmart.

Cheaper Alternatives

To get the best prices for your grocery shopping needs, a comparison is needed to evaluate the costs of competing warehouse stores such as Walmart, Target, and Costco.

It is safe to say that Safeway is one of the most expensive options, according to a study by Consumers Checkbook, receiving a low rating on affordability.

Let us look at how Safeway compares to other leading grocery superstores.

Is Safeway Cheaper Than Walmart?

Safeway may offer higher quality products compared to its competitor Walmart; they are a far more expensive choice.

Walmart also provides similar grocery store items such as canned goods, produce, and even some of the same inventory as Safeway; they are 16% cheaper.

Additionally, according to checkbook.org, Walmart was found to be 20% cheaper than similar grocery chains reviewed.

Is Safeway Cheaper Than Target?

Another popular grocery retailer is Target. Customer data science company Dunnhumby’s Retailer Preference Index (RPI) has released a new report on U.S. grocery stores that shows Target as the 3rd best digital service provided and 11th overall for cheapest grocery stores.

That’s above stores like Walmart and Publix.

Is Safeway Cheaper Than Costco?

Costco’s massive grocery and household product selection is an excellent alternative to Safeway. Both offer a similar selection of items and delivery services.

However, between the two, Costco is the more affordable choice. The same study by  Dunnhumby’s Retailer Preference Index (RPI), which looks at price, quality, and overall operations, found Costco rated the 9th cheapest grocery store.

Is Safeway Cheaper Than Amazon?

In terms of purchasing power and options, Amazon is one of the largest brands with a vast selection of grocery items and household products and a leader in speedy delivery services.

Found to be the number 1 cheapest grocery store according to the Dunnhumby’s Retailer study.

How to Save Money Shopping at Safeway

There are ways to budget and save money while shopping at Safeway.

Check out their website on Safeway.com or use their app, where they will feature weekly advertisements on select item discounts and coupons.

You can also register for their Just For U rewards card program, where members have exclusive prices and coupons.

Sign up for Safeway Rewards Program

Through their rewards program, you can receive the latest deals and promotions.  You can also save big bucks through Safeway’s grocery markdowns.

Whether the product is soon to be discontinued or there is damage to the package, Safeway will lower the price of certain products.

Safeway Produce magazine

Did you know Safeway has its magazine called Safeway’s Fresh Ideas magazine?  You’ll be able to find all the latest deals on lower prices and even coupons for various grocery items, including some of their high-quality organic foods.

Friday Sales

Did you also know about their weekly Friday deals? Yes, Safeway offers select products for $5 or less every Friday.

These items can be organic meats, fresh produce, deli products, and more. You can find the complete list of promotional items on their website.

Best prices are offered when purchasing on Thursdays or Fridays.

Safeway Promotions

Safeway also offers specific promos such as their Buy 4 Save 4 deals.

You can find which products are included in the promotion through their weekly sales and coupons on their website or app.

Safeway promotions also include deals such as buying a certain amount and getting one free.

Less Expensive Alternatives in Comparison

Let’s look at the best value options among the top grocery stores.

We’ll see how the weekly budget of the average family compares with Safeway’s average grocery bill.

Consumers Reports reviewed the leading retailers on quality products, prices, and services.

Safeway’s Cost Comparison

On average, studies show that consumers spend around $600 a month on food expenses such as canned goods, dairy and produce.

That number is climbing more due to modern-day issues such as gas and food prices. However, when compared to several grocery chains How does Safeway hold up?

Is it Worth The Cost?

With over 1000 stores across the country in 19 states, the availability of locations is a plus.

However, considering the costs of products in comparison with other chains such as Target, Walmart and Amazon, would it be worth shopping at Safeway?

Pros

Let’s take a look at some pros. If you enjoy shopping on Fridays, you’ll get some great deals.

You’ll get great deals on organic means and select quality products for $5 or less. Discounts and coupons are open for anyone, and you don’t have to sign up for any program.

Gas benefits

A pro I’d like to highlight is Safeway stores also sell gasoline. They offer a Fuel Rewards program (that you do have to register for but is free) that includes 1 point for every $1 used to purchase items at Safeway.

This means the more you buy at Safeway, the more you can earn at the pump.

Cons

Most products at Safeway can be found at other stores and often at lower prices. This leads to the main negative Safeway may not be worth it.

While they offer those excellent high-quality products and organic foods, these are marked at much higher prices.

Consumers can still find good alternative grocery items at other retailers.

Final Considerations

Considering operations costs, delivery services, organic foods and prices, Safeway is among the most expensive.

Still, taking into account their positive aspects, Safeway is not a bad option.

Safeway does offer some of the best quality products and exclusive brands, but that incurs additional operating costs.

Higher expenses inevitably result in increased consumer prices and increased costs for everyday grocery items.

Homemaking Team

We are a team of passionate moms and homemakers. Among us are certified nutritionists, chefs, certified food handlers, accountants, financial gurus, and other professionals. Our joint goal is to educate homemakers. Check out the about us page for more information about our team’s credentials.