Morrisons has admitted that Safeway’s sales were continuing to fall despite cutting 7,500 prices since the £3 billion acquistion was completed in March.
Safeway sales fell by 5.2per cent, or 7.3 per cent for the 10 weeks to March 16. Addressing the Morrisons annual meeting in Bradford, chairman Sir Ken Morrison said: “Sales volumes at Safeway have improved but not yet sufficiently to compensate for the lower prices.”
One analyst said: Morrisons is not finding it easy to deliver higher cash sales from lower prices. It’s a bit of a disappointment but you’d be mad to draw any big conclusions from this.
Sir Ken claimed that he was not disappointed with the response of Safeway’s customers to the price cutting. He said: “We’re trying to get customers to change the way they shop, so they shop the whole shop. It’s a long job.”
Same-store sales at Morrisons jumped by 8.9 per cent for the 15 weeks to May 16. The supermarket also said that since converting four Safeway stores into Morrisons, average weekly sales were up by 40 per cent. From next week a further 2,500 prices will be cut on different Safeway products. This week it launched Safeway’s first television advertising campaign to tell customers about the prices cuts.
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