The US’s biggest grocers have had a rough time of late. Walmart’s fourth-quarter and full-year results last week left much to be desired, while Supervalu was forced to sell big chunks of its business last year.

The US’s biggest grocers have had a rough time of late. Walmart’s fourth-quarter and full-year results last week left much to be desired, while Supervalu was forced to sell big chunks of its business last year.

Now, on the back of a year of flat sales, Safeway has confirmed it is in discussions about a possible sale. At present, no details of interested parties have been disclosed. However, the retailer is seeking ways to monetise its 49% investment in Mexican operator Casa Ley.

A sell-off here is expected - perhaps to Casa Ley itself.

The company is also forming plans to distribute the 37.8 million shares of Blackhawk Network, the gift and pre-paid card unit it took public last year, to Safeway shareholders.

Last year, Safeway sold its Canadian operation to rival Sobeys and disposed of its Chicago-based Dominick’s chain. That put the retailer in a better financial position, meaning it is now more appealing as a purchase option among potential suitors.

For the year to December 28, Safeway’s flat sales came in at $36.1bn (£21.7bn). Same-store sales (excluding fuel) rose 1.7%, though net income from continuing operations was $246.3m (£148.3m), a decline from $294.6m (£177m) last year.

Safeway operates more than 1,300 grocery stores in the US - mainly in the West and Texas - and thanks to a recent remodelling programme, they are not in bad shape. However, a concentration of stores along the West Coast means the retailer continues to be affected by the troubled Californian economy.

There is no obvious single retailer buyer in the line-up. Walmart already has national coverage, while Kroger is typically very fussy about growth through acquisition and already is in the midst of integrating newly acquired Harris Teeter anyway.

A wildcard may enter the mix in the form of an international entrant, but this is unlikely given the tough market conditions in the US. There’s more chance of international operators with an existing presence making a play for more market share. Ahold and Delhaize are the two big contenders from this point of view. There are some logistical issues (both operate mainly on the East Coast) but it’s a distinct possibility.

Realistically though, a management buyout seems the most obvious solution.