Safeway's six suitors have received confidential information confirming their worst fears about business at the supermarket.

The information points out the heavy costs associated with the chain's high-low pricing strategy. It also criticised the store refurbishment plan, and breaks down sales and profitability by category.

One person who has seen the information explained: 'The high-low strategy has been eroding their customer franchise and it is encouraging cherry-pickers who only buy the cheap products. Their pricing policy is becoming untenable.' A spokesman for Safeway added: 'The trading data is selective and subjective, just the sort of information that a potential buyer would use in order to talk down the price. The business is not being sold on the trading data lone, but on the strategic value of the business.

'It's premature to say that the refurbishments haven't worked. Some have only taken place during the last year and you would not expect to get a return in year one. On average, reformatted stores generate double digit sales increases.'