Safeway to close 17 stores


In one of the largest single retrenchments of a supermarket group in recent times, Safeway, part of the Argyll group, announced yesterday that it was closing 17 of its 383 stores, threatening up to 1,250 jobs.

The company said the closures were part of a review of the whole business and were a consequence of "a changing retail scene". The 17 stores, all of which are some of the group's smallest and oldest, were no longer considered viable. Many are making a loss.

The stores will be put up for sale and the locations could be of interest to some of the "hard" discounting groups such as Aldi, Lidl and Netto which have been expanding aggressively in the UK in recent years.

One City analyst said: "Times are tough and we are talking about 250,000 square feet of space being taken out of the market here. Safeway's problem is that it didn't fine-tune its portfolio in the late 1980s in the same way as Sainsbury or Tesco." Tesco closed 140,000 square feet last year as part of a constant store updating programme.

Argyll said the closures were part of its Safeway 2000 programme, which has concentrated on improving service and increasing the number of own- label products.

Andrew Fowler, food retail analyst at broker UBS, said: "There's no way these stores have suddenly become unprofitable. If they have, why haven't they got rid of them before? I think it's an attempt to clear the decks . There were always going to be some exceptional items in this year's results and now they can just add these to them."

Argyll said it was "inappropriate" to discuss possible job losses as the group hoped to redeploy some staff and offer others early retirement.

Safeway has also been creating jobs at its new superstores, such as the three in north London which opened in February. These stores, which are aimed at the well-heeled family shopper, have creches, dry cleaners and photographic film processing labs.

Some of the older Safeway stores have been put under pressure by new openings. One in Ferndown, Dorset, has seen a new, larger Safeway open three miles down the road, together with a new Sainsbury's and a Tesco.

Argyll has been struggling to keep up with its two largest rivals, Sainsbury and Tesco, both of which expanded at break-neck speed during the retail boom of the late 1980s. In December the company's interim figures showed that like-for-like sales at Safeway fell by 0.3 per cent on the previous year, the first fall since Argyll acquired the chain in 1987.

In February the group announced pressure on margins and a 4 per cent rise in underlying sales compared with Sainsbury's 5.5 per cent and Tesco's 7 per cent.

Argyll's shares closed 1.5p higher at 290.5p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine