October 22, 2008

Safeway Expands “PowerPump” Fuel Rewards to BP, ARCO and More Safeway Fuel Centers Nationwide

Safeway Inc. (NYSE:SWY) today expanded its PowerPump Rewards Program, bringing savings on gasoline to a wider range of customers nationally. Now, every Safeway fuel station is part of PowerPump, and, through a special Safeway alliance with BP, customers can also save on gas at their local BP and ARCO stations.

"The customer response to PowerPump has been tremendous," said Diane Dietz, Safeway Executive Vice President and Chief Marketing Officer. "By partnering with BP and ARCO, we have dramatically extended the opportunities for customers to accumulate savings on gas, whether or not their neighborhood Safeway has a fuel center."

"We are delighted to use the BP/ARCO network of more than 11,000 convenient fuel stations as a redemption outlet for the PowerPump Rewards Program," said Kevin Phelan, Senior Vice President for Marketing of BP Products North America.

Introduced in select markets earlier this year, PowerPump provides Safeway Club customers with a 10-cent per gallon reward on fuel at their local Safeway Fuel Stations for every $100 in store purchases, either in a single transaction or in multiple transactions. The new, expanded program gives customers beyond the reach of a Safeway fuel center a reward to use at "participating" BP or ARCO stations. For each $100 in accumulated store purchases, these customers earn a $1.50 reward towards a fuel purchase at a BP or ARCO station. The reward is automatically loaded to a reward card each time a customer spends an additional $100 at Safeway.

Certain gift card purchases also count, and they are a significant added benefit to this program. Smart shoppers will purchase gift cards at Safeway first before heading to the malls and earn even more gas rewards. For example, the purchase of a $100 Macy's, Best Buy or certain other retailer's gift card at Safeway is instantly added to a customer's overall accumulated total for gas redemption. The more eligible gift cards a customer purchases at Safeway, the more they save on gas.

Stores throughout the Safeway family of companies are part of the PowerPump program, including Vons, Pavilions, Dominick's, Carrs, Randalls, Tom Thumb, Genuardi's and Pak 'N Save. Nearly every purchase including eligible gift cards and prescriptions counts toward a fuel reward. For every second prescription filled, customers earn an additional reward of 10 cents per gallon at a Safeway fuel station or $1.50 per fuel purchase at a BP or ARCO. Customers can receive additional rewards when purchasing any of over 300 retailer gift cards sold at Safeway stores.

Customers can also choose when to use their fuel reward through January 3, 2009. The Safeway fuel pump's display screen asks customers if they would like to use their reward or save it for a future pump transaction. Customers who defer their total accumulated reward can still get an automatic 3-cent reward just for using their Club Card at the fuel pump. At a BP or ARCO station, customers can either swipe their reward card to use their current reward, or let the savings accumulate for a larger reward for the next fuel purchase.

ABOUT SAFEWAY www.Safeway.com

Safeway Inc. is a Fortune 100 company and one of the largest food and drug retailers in North America, based on sales. The company operates 1,743 stores in the United States and western Canada and had annual sales of $42 billion in 2007. The company's common stock is traded on the New York Stock Exchange under the symbol SWY.