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Wednesday, 19 November, 1997, 11:15 GMT
Safeway unveils plan to boost sales by 1bn
Supermarket giant Safeway has unveiled an ambitious plan to boost flagging sales by 1bn over the next three years.

And as a sweetener, the group revealed plans to hand back 600m to shareholders in the same period through dividends and share buybacks.

The company, which saw pre-tax profits remain static in the first half-year at just below 230m, also pledged to find 60m of cost savings as part of the three-year plan to kick-start the business and deliver investor value.

Chairman David Webster said: "Whilst we have increased earnings in the first half, we have not sustained the pace of improvement we anticipated.

"Our absolute priority is to restore real impetus to sales growth in existing stores over the coming months."

Like-for-like sales growth in the first half dipped to 3% from 4.6%.

Mr Webster said the group would raise standards of customer care, strengthen product ranges, and increase investment in training.

"These investments are affecting our second half performance and in the absence of a significant recovery in sales volume we anticipate that full-year profits will be slightly below last year."

The warning on profits comes just a month after the break-up of merger talks with Asda.

Safeway stressed on Wednesday that the aborted negiotiations had been a one-off and it was not talking to any other potential partners.

Steve Webb, director of corporate development, said: "We had to look at the Asda idea. It was a one-off and we are not looking at anyone else."

Six new Safeway stores opened during the last six months, including five superstores and a new-style mid-size store in Kirkham, Lancashire, adding 180,000 sq ft of space. Another nine stores are planned for the rest of the year, adding 200,000 sq ft.

It had created 2,500 new jobs in the last six months and, with this week's announcement of 2,000 new jobs in Northern Ireland, was on target to create 10,000 jobs over two years.

Investment in the first half was 244m, including 54m in its joint venture in Ireland, and was expected to reach 435m for the full year.

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