Safeway revamp boosts sales

By THIS IS MONEY
Updated:

 

SAFEWAY's revival under Carlos Criado-Perez is gathering pace, with the supermarkets chain hitting the top end of market expectations for first-quarter sales growth. The country's fourth largest supermarket chain also stepped up the price war in the sector, unveiling price cuts worth £120m.

Sales climbed 6.1% in the 12 weeks ended 23 June, stripping out factors such as new store openings. The market had expected growth of 5-6%. Safeway cited rising customer numbers and higher average spend.

The grocer's underlying sales growth was 5% in the previous quarter. However, the whole industry is currently enjoying buoyant conditions as strong sales growth is coupled with a return of inflation. Last month market leader Tesco produced 6.7% like-for-like sales growth in the first quarter.

Safeway has made a rapid recovery under Criado-Perez, a former executive at US giant Wal-Mart, the owner of Asda. The group is refitting and upgrading stores and product ranges after initially winning customers back with deep discounts on a relatively small selection of popular products.

Refurbished stores were producing double digit sales growth, the company said. The makeovers will introduce cafes, instore bakeries, bigger fresh food counters, pizza ovens, dry cleaning and photo-processing services.

Criado-Perez said the price cuts launched this week were already budgeted for. Last month Tesco chopped £60m off prices and Asda followed with £100m of discounts.

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