Multimillion pound bonuses to persuade its staff not to leave during the long-running takeover battle for Safeway was "money well spent", the supermarket group said yesterday as it announced a surprise rise in underlying sales.
The company paid out £9m in staff retention and loyalty bonuses during its first half, in addition to clocking up a further £3m in fees for its City advisers. This brings the total cost of the 10-month bid saga to £35m.
Simon Laffin, the finance director, said staff turnover at the group's head office in Hayes was "unchanged" compared with last year, while fewer staff had left its stores during the year. "We are absolutely convinced the money spent on retention payments has increased profits. It was money well spent," he said.
Safeway revealed that like-for-like sales rose by 0.7 per cent during the three months to 11 October, surprising analysts who had expected a fall. The rise reversed the 0.6 per cent fall in the first quarter, leaving the group with a 0.1 per cent first-half advance. Total sales over the 26 weeks to 11 October climbed 1.2 per cent to £5.2bn as the company opened two new stores.
It estimates that interim profits will be £173m before exceptionals, which also included £2m of redundancy costs and an £8m charge for additional pension costs, down from £187m last year.
Mr Laffin said the group has asked UK competition authorities, which have barred all but Wm Morrison and Philip Green from bidding, to clarify what they meant by forbidding Tesco, Asda and J Sainsbury from acquiring "any part" of Safeway.Reuse content