 Safeway did not enjoy a Merry Christmas |
Supermarket group Safeway has announced a sharp fall in sales in what could be its final trading update before being taken over by Morrisons. The store said like-for-like sales in the 12 weeks to 3 January fell 4.1%.
Insisting that the figure was in line with its expectations, Safeway said shareholders would vote on Morrison's �3bn takeover offer on 11 February.
Safeway added that its directors will leave the combined company if the deal is approved.
Awaiting approval
It had originally been planned that Safeway operating director Jack Christensen and marketing director Jack Sinclair would stay on at Morrisons.
But it is understood that Morrisons could not find suitable long term roles for them.
However, Mr Christensen will stay put until June in order to help with the integration of the two businesses
On 11 February, both Safeway and Morrisons will hold extraordinary general meetings.
"We hope both sets of shareholders will support the proposals," said Sir Ken Morrison, executive chairman of Morrisons.
Morrison shares were down nearly 1% at 228.75p in late afternoon trade, while Safeway fell 0.5% to 286.75p.
Analysts said the latest decline in Safeway's sales spelled trouble for Morrison.
"From Morrison's point of view, whichever way you look at it, it is not good news. Either pricing is drifting up or costs are being cut to maintain profit. Both will make the new owners life harder," said Andrew Fowler at Merrill Lynch.
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