February 1, 2015

A Blast from the Past: Safeway is Taking Lead Role In Switch to 48 by 40 Pallet

(Editor’s Note: This story begins a WG&S series that looks at some of the stories the magazine has covered in its 85 year history. Reprinted from the March 1985 issue of WG&S.)


Although they haven’t issued an ultimatum and they dislike the word pressure, Safeway officials are pushing some segments of the produce industry onto a standardized grocery pallet.

From President Peter Magowan to produce manager Rex Coffey, produce shippers are getting the word: “Palletize on the grocery pallet or you risk losing our business.”

Coffey said the company’s position could be summed up by saying that everything being equal, Safeway will buy its produce from suppliers who ship it on the standard pallet.  Because of the size of customer that they are, they have convinced shippers of almost every commodity to comply and when one agrees, you can bet another shipper won’t be far behind.

“We think this makes a lot of sense for every level of distribution and for maximum productivity,” Coffey said.  “We are smart enough to know that if this doesn’t benefit everybody, it will never fly.”

Coffey said the use of a standard pallet that ultimately can be reused and transferred from shipper to wholesaler to retailer and back again is a good idea.  “We are serious about this and we are applying steady pressure, although I don’t like that word.”

He said that with commodities that have been slow to change, Safeway is trying to “work” with shippers to facilitate that change.  A case in point, he said, is the stand that Safeway has made with respect to Imperial Valley lettuce shippers this season.  The company basically said it will only buy palletized lettuce loads on 48 by 40 inch pallets.  He said the company has questioned the need or wisdom of paying for palletized loads on a different size pallet when that pallet does not fit into the chain’s distribution scheme.

Coffey readily admits that Safeway used the Imperial Valley for launching this position because almost all of the winter lettuce comes from this area or contiguous districts.  He said Safeway would be much less successful instituting such a program during the summer when 10 different districts produce iceberg lettuce.

But Coffey again resists calling the effort pressure.  “We consider this part of the selling process.”  He indicated that the customer tells the seller what he wants and if a particular seller can meet those standards, a sale will be made.

Though they don’t say it in so many words, Safeway officials are determined to pull the produce industry into standardization, kicking and screaming, if need be.