Morrison reveals 'disappointment' at Safeway referral
had been 'surprised and disappointed' by the decision to refer
Morrison's bid for Safeway to the Competition Commission. But he
did not rule out victory in the bidding war - either alone or in
partnership with one of the other bidders.
Sir Ken Morrison, chairman of the Yorkshire-based supermarket group which carries his family name, must have had some idea that his bid for the Safeway supermarket group would shake up the UK grocery retail sector, but one wonders whether he expected to find himself in the middle of a five-way battle for the chain.
Whatever his expectations were before the bid was referred along with three others to the Competition Commission, Sir Ken yesterday admitted that he had been surprised and disappointed by the decision.
Speaking to shareholders at Morrisons' AGM, he said that the decision to refer the bid - " totally dissimilar to that of the other three companies" - was a major shock to the company.
"It must have been apparent that the effect of our intended merger with Safeway in terms of reducing competition was absolutely minimal when compared with the impact which could be caused by the larger more powerful companies," he said.
"We have nonetheless persevered with our efforts and remain firmly convinced that Morrison plus Safeway would be in the best interests of the shopping public. Four major national groups, rather than three, would simply offer a wider market and do more to stimulate a good competitive climate - this must favour the consumer and also the supplier, whether they be manufacturers, growers or producers."
He added that there was considerable support for his company's bid for Safeway, from organisations as diverse as the National Farmers Union and the Consumers' Association.
"I must also make it clear that we appear to have raised the expectations of many potential new customers who eagerly await our presence in their local areas. I believe they also think that their interests will be better served by four major national groups rather than three."
But despite his criticism of the bids from larger rivals Tesco, Sainsbury and Asda, Morrison did not rule out joining forces with one of them to win control of Safeway - a move which could well be the solution to overcoming competition concerns, since no one group would gain control of Safeway's entire store portfolio.
He did, however, appear to rule out a possible bid for Somerfield, the other British grocery retailer at the centre of takeover speculation in recent weeks.
Commenting on the company's performance in the previous year, Morrison highlighted the fact that the group's market share had risen to an all time high of 6.2 per cent, helped by the company's continued focus on good value for money and by the opening of seven new stores during the year.
A further 15 stores, which will secure another 4,000 jobs across the UK, areplanned during 2003 and 2004, he said. Two of these are already open for business, with seven more set for the rest of the year.
Next year will see the company expanding into Scotland for the first time with stores in Glasgow, Kilmarnock and Falkirk.
Current trading is very strong, Morrison also told shareholders, with total sales for the first 14 weeks of the new financial year showing an increase of 14.2 per cent. Like-for-like sales are also encouraging with a lift of 8.4 per cent or 6.9 per cent if fuel sales are excluded.
"Win lose or draw in the Safeway saga, we have a strong company well equipped to continue to prosper in these increasingly competitive times. I view the future with much confidence and look forward to another year of good steady progress," he concluded.
