Outlook: Safeway cut
Friday 26 November 1999
A former Wal-Mart man, Mr Criado-Perez knows all about price competition, but he also plans to change a few things on the shop floor. Take lettuces. Why, he wants to know, are they stacked in unattractive green trays, face down in sweating plastic wrapping? Free the lettuces, he says, and make the products look like you want to eat them. Ooh-er, it was never like this when stodgy old accountant Colin Smith was at the helm. But then the shares never did anything back then and neither did the profits.
So it was that Carlos the Lettuce Liberator talked a good game yesterday as new brooms usually do. Unfortunately, the first thing he chose to sweep out the door was the dividend, which has been slashed to make room for further investment in lower prices. The plan is to increase sales and profits by next summer with a concoction of better value, better service and improved range and availability.
It all makes sense, of course, but can he deliver? With the shares at the current level there cannot be much downside. At 179.5p they trade on a forward multiple of just 9 and offer a yield of over 5 per cent even after the dividend cut. Furthermore, the current market capitalisation of pounds 1.7bn values each Safeway store at just pounds 6.5m compared to pounds 22m even for William Morrison's. This is clearly an anomaly. The only trouble with anomalies is that sometimes they are justified. "Our stores are really empty," says Mr Criado-Perez. "I'm sorry to be blunt, but it is true". New brooms can say that sort of thing and they are clapped for doing so. If he's still saying it in a couple of years, he too may be walking the plank.
- 1 Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
- 2 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 3 The Simpsons death: Creator Al Jean would 'kill himself' before character like Homer or Lisa
- 4 British man raped while urinating in bushes at Oktoberfest beer festival in Germany
- 5 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
Isis an hour away from Baghdad - with no sign of Iraq army being able to make a successful counter-attack
British man raped while urinating in bushes at Oktoberfest beer festival in Germany
George Clooney and Amal Alamuddin wedding: The famous congratulate actor and human rights lawyer after Venice nuptials
Isis, we are told, is a 'clear and dangerous threat to our way of life'. I’m sorry, but I just don’t buy it
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
'Women, walk wherever you want' posters taken down in Stamford Hill following 'unacceptable' signs separating men and women
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Should gay sex be illegal? 16% of Britons think so
- < Previous
- Next >
iJobs Money & Business
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...
£300 - £330 per day: Ashdown Group: SQL Developer (Stored Procedures) Watford...