Morrisons gets off to a good start
weeks of 2003 - lending more support to its case for offering the
best opportunity for growth for Safeway.
Morrisons, the UK supermarket group which sparked off the bidding war for Safeway earlier this month, has reported strong post-Christmas sales, a timely reminder that while it might be smaller than most of the other hopefuls taking an interest in Safeway, it is more than capable of holding its own when it comes to generating sales.
The Yorkshire-based company said that sales in the four weeks to 26 January were up 10.4 per cent compared with the same period last year, or 5.2 per cent on a like-for-like basis.
There was a particularly strong performance from the home and leisure departments, reflecting a growing trend in the UK retail market towards non-food sales. Home and leisure sales were up 15.4 per cent on the previous year, or 10.0 per cent on a like-for-like basis.
Commenting on the figures, Sir Kenneth Morrison, executive chairman of the company, said: "Following our solid performance over Christmas which has left us in good shape for the start of 2003, I am very pleased that we have made further progress in January, especially in the current environment of price deflation and economicuncertainty.
"Morrisons prides itself on consistently providing its customers with high quality products at low prices, day in, day out - and the resultsachieved demonstrate their strong support for our offering."
The sales performance of Morrisons will not of course have any bearing on the decision of the Office of Fair Trading to accept or refer its takeover offer for Safeway - the OFT is more concerned with consumer choice and maintaining competition - but the double digit increase in turnover will certainly do no harm when it comes to persuading Safeway's shareholders that Morrisons is well placed to improve the performance at Safeway's stores.
Whether this will be enough to persuade them to opt for Morrisons over other companies, such as Tesco or Asda, which will almost certainly offer more for their shares, remains to be seen.
