Safeway heralds 'solid' results

Safeway has reported strong sales growth, and set the scene for announcing "solid" results next month.

Safeway, the UK's fourth biggest supermarket chain, said like-for-like sales rose by 5.4% over the July to October period, the eighth successive quarter in which the retailer has delivered growth of more than 5%.

The retailer is accelerating a store refurbishment and investment programme, which will see the first Safeway hypermarket open in Plymouth later this year, to support further sales growth, a statement on Thursday said.

"We are totally committed to achieving the significant benefits which rolling out our new formats can deliver, both for our customers and our shareholders," chief executive Carlos Criado-Perez said.

"We have maintained our momentum despite the initial costs of accelerating the pace of store reformatting, and we look forward to delivering solid results."

Keeping up

The figures, while in line with City forecasts, gave analysts few clues as to who is pulling ahead in an intensifying battle among UK supermarkets.

While Safeway's sales growth over the July to October quarter was lower than the 6.1% the retailer achieved in the three months before, it was marginally ahead of the figure reported by rival Sainsbury's on Wednesday.

Including petrol revenues, Sainsbury's achieved like-for-like sales growth of 5.3% in the latest quarter.

"What the last two days have proved is that it is still too early to identify who the prospective winners and losers will be," said Andrew Kasoulis, analyst at Credit Suisse First Boston.

"They're all doing well at the moment."

Clive Black, analyst at ING Barings, said: "Everyone made a big fuss over Sainsbury¿s yesterday. Today has been more muted, and yet Safeway has done even better."

Trading revival

Thursday's figures come almost two years after Mr Criado-Perez, a former executive at US retail giant Wal-Mart, took charge at Safeway.

Under his leadership, Safeway scrapped its loyalty card programme in favour of a strategy based around loss leaders, a move which has helped customer numbers surge by 1.5 million to 11 million.

Safeway stock stood 4¼p lower at 338p in late morning trade in London.