Tuesday, July 13, 1999 Published at 09:30 GMT 10:30 UK
Business: The Company File
Safeway creates 3,500 jobs
Safeway hopes that an expansion plan can boost its business
UK supermarket group Safeway has announced that it will create more than 3,500 jobs across the UK as it expands its chain of stores.
The expansion plans come despite a drop in profits. Pre-tax profits are now expected to be about £320m, down from £340.6m a year earlier.
In its annual shareholders statement, released on Tuesday morning, Safeway said its sales on an existing store basis were down 0.3% for the 14 weeks to 10 July.
Total sales - including shops added during the past financial year - were up 0.8% for the period and Safeway noted sales have in recent weeks continued to strengthen.
About 2,500 of the jobs will be created in England, 900 in Scotland and 200 in Wales.
The company warned that market conditions will remain very challenging, particularly with the entry into the UK of a new competitor, Wal-Mart.
The US giant, the largest retail group in the world, entered the scene last month with a surprise £6.72bn cash bid for Asda. The move threatens to change the face of shopping in the UK and is likely to prompt further consolidation in the sector.
Safeway hopes that it can revive its business through an agressive expansion programme and a new round of price cuts which were announced on Monday.
New stores means new jobs, although some Safeway employees are likely to lose theirs. The company said it would try to slim down the management in its regional stores.
Safeway's Chief Executive Colin Smith said the jobs would be created in 12 new supermarkets and 35 convenience stores in its forecourts joint venture with BP.
By 1030 Safeway was trading ahead 1.75p at 239p on provisional volume of about 544,000 shares.
The Company File Contents