Sales growth slows at Safeway

SUPERMARKETS chain Safeway has provided fresh evidence that it is losing momentum as it unveiled a decline in underlying sales growth for the 12 weeks to 30 March.

The food retailer, led by chief executive Carlos Criado-Perez, unveiled a 4.1% increase in fourth-quarter sales, excluding the impact of new space.

Third quarter like-for-like takings were up 4.1% but the most recent figures include a 0.6% boost from Easter. Stripping out the Easter effect, underlying sales grew by 3.5%. Total sales grew by 5.1% in the year to 30 March, while the like-for-like increase was 4.9%, from 5.2% the previous year.

Sainsbury's last week said its like-for-like sales climbed 6.8% over the same period, or 4.3% stripping out the effect of Easter. Tesco posted its best fourth-quarter results for five years, although that period included Christmas trading.

Safeway said its revamp had dented the performance. Several stores are being converted to hypermarkets and about 25% of the stores have been refurbished. 'This is a satisfactory performance given the scale of change in stores undergoing reformatting,' Safeway added. The shares tumbled 4p to 301p.

Safeway is due to report its full-year results on 15 May. Analysts expect pre-tax profits of about £350m, up around 11%.