Sales down 8% at Safeway

WM MORRISON has failed to turn around a decline at Safeway, the superstore chain it bought for £3bn in March.

Industry figures from market research firm TNS show Safeway's market share slipped from 8.2% to 8% in the 12 weeks to 25 April. A year earlier it was 9.1%. Sales were down 8% on a year ago.

Morrisons plans to rebrand most of the 427 Safeway stores in an attempt to stem the sales slide and has already slashed prices on 7,500 products. The move has pushed up sales volumes but failed to impact on total income. Last month it revealed that Safeway sales in from 8th March to 16th May were down 5.2%.

However, it said average weekly sales at the few stories that have already been converted were up between 19% and 88%, with an overall increase of 40%. 'Whilst these results are not necessarily typical indicators for future conversions they at least show the potential for the Safeway estate,' the company said.

Morrisons hopes to convert 50 stores by November. It must also sell 52 of its shops to meet terms laid down by the Competition Commission.

TNS' monthly research also showed Tesco had extended its lead over rivals, grabbing a 27.6% percent, up from 27.5% a month earlier and 26.4% a year before as sales grew 10% on the year.

Asda, owned by US giant Wal-Mart, had a 16.6% share, unchanged from a month earlier, as was Sainsbury's 15.5% slice of the market.