The update, it is rumoured, will show sales growth over the important 14-week Christmas and new year period up by less than 3 per cent.
It is the last of the major food retailers to produce a festive trading update. One, due last month, was surprisingly postponed, a delay which set alarm bells ringing. Then last week trading director George Charters suddenly departed, underlining fears that the retailing group, which had already produced two profit warnings, could be encountering serious management problems.
There are even worries that the group has, in effect, been "buying" sales by cutting prices.
The market sees the gap widening between Safeway, the fourth largest chain, and its bigger rivals, Tesco, J Sainsbury and Asda. And although the proposed grouping of Kwik Save and Somerfield is seen as two weak players offering support to each other, there is little doubt the new group will represent increased competition to its nearest rival - Safeway.
Asda is known to be keen to swallow Safeway. Talks failed when it became apparent the Government would not welcome a pounds 9bn Asda/Safeway alliance. Asda, it is suspected, has continued to press its case in the corridors of power. It may be that Safeway's performance has declined so miserably it may be forced to seek a friendly merger.
Sainsbury and Tesco are ruled out on competition grounds. There has been vague talk that Marks & Spencer could be interested, although an M&S strike would astonish most observers.
Safeway's shares have been as high as 426.5p. They touched 319p in December, rallying on bid hopes.
Asda rose 2p to 204p; Sainsbury, Tesco and M&S were lower.
After last week's heroics blue chips ran out of steam with Footsie falling 48.8 points to 5,702.8. Still the supporting indices remained firm, reaching new peaks.
Profit-taking, an uncertain New York and weak futures combined to remove an early shine which took Footsie to a trading high and just 6.8 from the 5,800 milestone.
Bass celebrated its pounds 1.8bn Inter-Continental Hotels & Resorts acquisition with a 56p gain to a 1,016p peak as fears that it paid too much were judged to be misplaced. Cadbury Schweppes, buying two US soft drink bottlers, rose 20.5p to 756.5p.
British Aerospace was another at a new high, up 29p to 1,909p. Overseas investors have broken through the 29.5 per cent ceiling. Unless the foreign limit is relaxed - and many expect the Government to do so - the surplus shares will have to be sold, which usually means the overseas investors involved suffer a loss.
Rolls-Royce, the other aerospace group subject to a 29.5p per cent foreign limit, was little changed at 208.25p.
Standard Chartered, after a weekend of takeover speculation, ended 22.5p off at 742.5p after touching 803p in heavy trading. It denied it was in talks with Barclays, little changed at 1,876p. HSBC, on results, firmed 3p to 1,775p.
The latest frenzied outbreak over Standard is yet a further illustration of the market's deep conviction that a series of mega financial deals are inevitable.
The easing of tension in the Gulf left British Petroleum off 22.5p to 805p and Enterprise Oil 6p at 554p.
First Leisure Corporation's long awaited bingo sale lifted the shares 12.5p to 323p; General Cable, the communications group, gained 8p to 117p before confirming a bid approach after the market closed.
Ulster Television was a shade firmer at 243p. Scottish Media sold its 18.2 per cent stake at 250p a share to CanWest Global Communications, the Canadian group which now has 29.9 per cent.
Transport Development, the transport group, surged 60.5p to 250p after producing plans to return pounds 109m to shareholders and the sale of its plant hire business.
Body Shop International remained on edge over threats of legal action in the US, falling 6p to 121p. Merrill Lynch sell advice also hit sentiment. Brown & Jackson, the Poundstretcher chain, continued to respond to its improving trading performance, gaining 5p to 52p.
Printer Watmoughs rose 26.5p to 345p after Investcorp, a Middle Eastern group, made the signalled agreed offer - 345p.
Biocompatibles International clawed its way to 202p, up 27p, against the 130p low hit earlier this month following the unexpected departure of chief executive Alistair Taylor. Some dream of a Smith & Nephew bid.Reuse content