Safeway chief hits out at analysts
will lead to speculation about a possible takeover, rather than
looking at the company's true financial performance, according to
Safeway's chief executive Carlos Criado-Perez.
There has been much speculation in recent weeks about the possible future of the UK's fourth largest food retailer Safeway, with the latest talk centred on a potential - if unlikely - bid from the Royal Bank of Scotland.
Safeway, as always, has been quick to deny the rumours, but last week the chain's chief executive Carlos Criado-Perez went a step further, accusing analysts of deliberately playing down the group's performance and thus inviting further speculation about the chain's future.
Criado-Perez told the Financial Times newspaper that the truth about Safeway's performance was being ignored because analysts were more interested in stoking the fires of rumour and speculation. He said that the company's like-for-like sales figures showed it was performing in line with rivals Tesco and Sainsbury, but that a cursory glance at the figures would not necessarily show this.
Both Tesco and Sainsbury include existing stores with extra selling space in these figures, Criado-Perez told the paper, while Safeway does not.
"When all you look at is like-for-like, we are totally handicapped by that measure. But most analysts chose to ignore that. I feel angry about this," he told the FT, adding that analysts had chosen only to highlight "either things that sell newspapers or things that make more excitement in the stock market".
He added that analysts should look on Safeway's figures as part of his five-year plan to turn the chain around, which was only in its third year, rather than continue to highlight the company's troubles.
Asda, the UK's third largest supermarket group and a subsidiary of the world's leading retailer Wal-Mart, has been linked to a possible buy out of Safeway, a rumour which both chains have denied and which in any case would almost certainly fall foul of the UK regulators.
The alleged RBS bid was said to get round the competition problems by buying the chain and selling off its stores on a piecemeal basis to its rivals, but this too was denied by the chain.
It is in fact hard to see how Safeway could be bought by any of its UK rivals - at least those who could afford to buy it outright - without incurring the wrath of the competition bodies, and the chain's future is more likely to be as a revamped food retailer under the tutelage of Criado-Perez than as a major acquisition by one of its rivals.
How long that revamp will take to come about is unclear, but Criado-Perez clearly believes analysts should at least wait another two years before pronouncing judgement. They are unlikely to give the company that much grace, however, and the rumours will continue to circulate until Safeway's figures, either like-for-like or otherwise, show that it can survive in the increasingly competitive marketplace.