Outlook: Wounded in the trolley wars
Wednesday 25 February 1998
The generous view is that Safeway's travails now are akin to those suffered by Sainsbury a couple of years ago - sluggish sales, problems with product availability and management complacency. In truth there are distinct differences, which may make it difficult for Safeway to emulate Sainsbury's recovery. While Sainsbury's always had a strong brand and a good store portfolio, Safeway has neither. Its brand name is by comparison minor league and its stores are worse.
And then there is the management. Colin Smith and his team seem to be all at sea, casting around for ideas. David Webster, the chairman, and the last of the Gulliver triumvirate which put Argyll on the map, seems an increasingly peripheral and disinterested figure. Indeed there could be some significant in the fact that the top three in this company are all finance directors by background, more used to financial wizardry than the cut and thrust of trading in one of Britain's most competitive industries.
Tesco, by contrast, has a marketing man at the helm - Terry Leahy. Asda is run by a highly regarded fast moving consumer goods expert - Allan Leighton. Both are a decade younger than the Safeway top brass, who continue to maintain a comfy office in Mayfair while the real business is going on in Hayes.
No wonder the company has become the subject of persistent bid speculation. With M&S ruling itself out, Asda still represents the most likely potential partner for Safeway. But while Safeway may need Asda, it is not clear Asda needs Safeway. Asda might be able to add some value with its lower priced offer and more dynamic management. But many Safeway shops are too small for Asda's non-food lines. Besides, Asda will be picking up market share anyway with the number four in the pack struggling.
Even if Asda were keen, regulatory hurdles could well prove insurmountable. The Somerfield-Kwik Save merger, which is unlikely to be blocked on competition grounds, only makes matters worse. Regulators may be prepared to allow one grocery merger through on the nod, but not two. Safeway faces the prospect of lagging further and further behind in the trolley wars - a distant fourth to the new "Big Three." It may not be entirely management's fault but the City won't be forgiving all the same. Expect more top level executive changes over the next six months.
- 1 Venezuela Expo Tattoo 2015: Extreme body art from 'Vampire Woman' to 109mm earlobes
- 3 Ball pool for adults opens in London
- 4 Game of Thrones season 5 trailer: The first full-length look is here
Mia Khalifa: Pornhub star claims Drake sent her 'cringeworthy' naked photos on Instagram
Boris Johnson claims porn-obsessed Islamic jihadists are 'literally w*****s'
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Putin opponent reveals Russian President's daughter's secret identity
Ball pool for adults opens in London
9 reasons Greece's experiment with the radical left is doomed to failure
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
King Abdullah dead: We can't afford not to hold Saudi Arabia's royals to account
iJobs Money & Business
£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...
£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...