Safeway disappears as Morrisons ends conversion
One of the UK’s best known supermarket brands will disappear later this week when Morrisons completes the conversion of £3bn (€4.3bn)-acquisition Safeway.
The Safeway name will be consigned to history 43 years after it opened its first supermarket – with the only temporary reminder being a few lorries still bearing its logo.
Its takeover last year was one of the most hotly-contested battles in recent UK corporate history, involving private investors and all the major supermarket groups before it was eventually snapped up by Morrisons.
Out of the 479 shops acquired in the deal, more than 200 Safeway stores have been converted to the Morrisons format, with the last four due to open under the banner tomorrow. Other stores have been sold to rivals, while a handful that are not being converted will close to shoppers on Saturday.
Morrisons chief executive Bob Stott described the completion of the conversion as a “significant landmark” in the history of Morrisons – although the transition has been far from smooth.
The deal has transformed Morrisons into the fourth-biggest food retailer in the UK but has also led to a string of profit warnings. The Bradford-based grocer posted the first loss in its 106-year history last month as it faced up to costs of the conversion.
Problems included dual running costs in areas such as distribution, administration and IT.
Despite the difficulties, Morrisons has maintained that its performance will improve “significantly” once the conversion is complete. Recent results showed like-for-like sales at converted stores were 13.7% higher in the 12 weeks to October.
Morrisons received a boost last week when data from market research firm TNS showed the combined firm’s share of the UK grocery market rose to 15.7% in the previous three months from 15.5% a year earlier.
Operations director Mark Gunter said one of the main challenges experienced was growing the brand in places where it was not already well-known, particularly in Scotland and London.
He said that in the past, company integrations had failed when firms ended up being a “hybrid”.
He admitted the company sent out a “very confusing message” when people walked into a Morrisons store but still saw Safeway carrier bags, but said there had to be some crossover and that this phase was now complete.
As well as refurbishing stores, Morrisons has made changes to its operational and support systems.
One of the key features of converted stores is the Morrisons “market street” format – a collection of individual fresh food counters, including a fishmonger, traditional butcher, in-store bakery, cheese and bacon counters, delicatessen, pie shop, salad bar, cake shop and ovenfresh counter.
There are now more than 360 Morrisons stores in the UK as a result of the deal.
