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Wednesday, 15 May, 2002, 06:50 GMT 07:50 UK
Safeway revamp hits sales
Safeway supermarket
Safeway is to press ahead with store refurbishment
The UK supermarket chain Safeway has unveiled an increase in profits, but has admitted that its long-running store refurbishment programme has cut sales growth.

The company said on Wednesday that pre-tax profits for the year to late March rose 11% on the previous year to 355m, while sales edged up 5% to 9.4bn.

Safeway added that its refurbishment programme - aimed at offering customers a wider range of foods in an "attractive and appealing" environment - continued apace, with 71 stores now refitted.

But it acknowledged that in-store construction work deterred some shoppers, trimming sales growth during the final six months of the year.

Builders displace shoppers

"During the second half, the sales lost from stores undergoing transformation was greater than the sales gained from those relaunched," the company said in a statement.

But Safeway predicted that revenue growth will pick up again as the store overhaul nears completion.

"We expect performance in the remainder of our first quarter to progressively strengthen as the pace of new format store relaunches picks up," said Safeway chief executive Carlos Criado-Perez.

In the City, Safeway shares fell 9.5p to 308p in early trade on Wednesday.

See also:

21 Nov 01 | Business
Sainsbury's profits edge higher
01 Nov 01 | Business
Supermarkets code 'too weak'
25 Oct 01 | Business
Safeway heralds 'solid' results
28 Aug 01 | Business
UK 'poised for supermarket wars'
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