• Los Angeles Times, Friday, October 16, 2009 10:41 AM

We've heard that some folks can divine the future by reading tea leaves; Safeway CEO Steven Burd is more inclined to examine coffee grounds.

"When we went into the recession, we saw a change in the mix of lattes versus coffee, and now we've seen -- it's early but we're seeing -- a trend back to lattes," he told investors yesterday while announcing that third-quarter profits were boosted by shoppers trading up to more expensive items.

They are also buying more expensive wines, Burd says, which suggests that "we're at, or near, the bottom of this whole thing, and that would be good for all of us if that's true."

That said, Jerry Hirsch reports, Safeway earnings were down 15 cents a share from a year earlier for the quarter ended Sept. 12 and revenue declined 7% to $9.46 billion. Sales at stores open at least a year fell 3%, excluding gasoline sales.

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