On July 9, Safeway Inc., the American grocery chain, reported a 16 per cent increase in second-quarter earnings before a one-time charge. However, same-store sales fell short of expectations, and its stock dropped 7 per cent. Safeway said earnings in the quarter ended June 16 was $325.1m, excluding a charge related to online store GroceryWorks.com. That compared with $280.9m in the same period of the prior year. According to Safeway, total sales in the quarter rose 7.7 per cent to $7.99bn from $7.42bn a year ago, primarily because of the acquisition of Genuardi's, new store openings and increased sales at continuing stores. Sales at stores open at least a year rose 1.7 per cent. Identical-store sales, which exclude replacement stores, rose 1.1 per cent. Analysts said they had expected a 2.8 per cent rise. Safeway recorded a charge of $30.1m reflecting a change in accounting for GroceryWorks. Including the charge, net income for the quarter was $307.3m. Last month, Safeway sold a 35 per cent stake in the Internet venture to British grocer Tesco Plc.