City ponders Asda strategy

The city has been left guessing by the Asda supermarket group's failure to launch a much-touted takeover bid.

Safeway had been heavily tipped as the target of Asda boss Archie Norman's hostile bid but the Yorkshire-based company did not use the announcement of its half-yearly results to launch an attack on its rival.

Mr Norman was careful not to rule anything out and added: "Yes, we are happy to go it alone and in many ways our preferred route is to go it alone.

"If there were to be any broad scale restructuring we would have to see where we would fit into that."

Asda and Safeway had tentative merger talks in September but Mr Norman said nothing had come of it.

Asda announced pre-tax profits for the six months to November 15 of £190 million, an 18% increase on the same stage last year.

The record results provided the first evidence of a three-year plan Asda announced six months ago.

Sales were up by 13.7% and the group's market share jumped from 10.6% to 11.7%.

Asda has avoided following rival Sainsbury's, which has set up its own bank, and struck a deal with Lloyd's TSB.

The Leeds-based firm posted a 17% rise in fresh meat and the company said: "We continue wholeheartedly to support British beef."

Six new "market hall" stores were opened during the half year - four new and two replacements of existing stores - with seven new stores planned for the second half.

Asda also promised to double its 15 hypermarkets over the next two years.

Shareholders saw their half-year dividend lifted from 0.81 pence to 0.91 pence.