Safeway sales still on the slide

SALES continue to slip at Safeway supermarkets under new owner Wm Morrison, but chairman Sir Ken Morrison says it is now winning back customers and producing big increases in the early store conversions.

While the original Morrisons chain continues to show industry-beating increases of 8.9% like-for-like, Safeway sales fell 5.2% in the 10 weeks to 16 May, or 7.3% excluding petrol. The decline in customer numbers slowed from 7.4% to 7.1%.

The Safeway slump comes despite a raft of price cuts implemented by Morrisons as soon as it took control. Some 7,500 prices have been reduced, but the sales uplift has not been enough to offset the impact of lower prices.

Sir Ken said the differences in culture between the two chains are 'rapidly being overcome', although the introduction of a new accounting system by Safeway earlier this year has proved an added problem. Some Morrisons products are now appearing on Safeway shelves and are being well received, he said.

The first Safeway stores to be converted to the 'no frills' Morrisons format - at Ripon in North Yorkshire, Southport, Leeds and Chester - are showing sales increases of more than 40% than their average in the preceding 13 weeks.

The conversion programme will gather pace in coming months and Sir Ken said: 'Although there remains much work to be done on the integration, I view the future with optimism in what promises to be exciting times.'