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Safeway to hire 8,000 more staff

Safeway, Britain's fourth-largest supermarket group, is to create 8,000 jobs over the next two years as it opens stores and extends customer service programmes. Most of the jobs will be in new stores, with Safeway planning to open 17 supermarkets this year, writes Nigel Cope.

The total also includes 1,600 jobs in existing stores as the company expands its Queuebusters campaign and the Shop 'n' Go self-scanning scheme which is being extended from 117 to 165 stores this year. The announcement comes two years after Safeway cut 4,000 jobs as part of its Safeway 2000 programme to improve efficiency.

Colin Smith, Safeway's chief executive, said the introduction of a minimum wage would only affect the company if it was fixed at more than pounds 3.80 an hour, which is Safeway's lowest rate. A minimum of pounds 4 an hour would cost the company pounds 4m a year, he said.

The comments came as Safeway reported full-year profits of pounds 420m compared with pounds 429m the previous year. Encouraging news on like-for-like sales, which were up 3.7 per cent in current trading, boosted the shares 23.5p to 354p.

The City had been braced for bad news after Safeway's profits warning in February and the recent announcement of market share gains by Tesco and Sainsbury's. Safeway said its market share rose from 7.5 per cent to 7.8 per cent in the year.

Analysts said the addition of 1,600 customer service jobs was due to a loss of competitiveness in the fourth quarter of last year. City analysts were generally positive on Safeway's announcement. However, Frank Davidson of HSBC James Capel pointed to a weaker store portfolio and the perception of higher prices as issues that could hinder progress.

Investment column, page 24