If you don't use a card at Safeway you are way overpaying. It isn't a "discount", the list price isn't competitive. But the phone number I give them is one that I had 20 years ago, so it's of limited use to them.
I actually think Safeway is getting exactly what they want from you. They don't care to know who you are, they just want to know the frequency and correlation between the items you buy.
That's not to say it's a bad thing that they are getting what they want. Not all data collection is an evil surveillance problem. Data can be useful for society too.