Safeway (UK)

File:Safeway plc logo.png

Safeway Food Stores was established in 1962 in the United Kingdom by the American supermarket chain Safeway, with seven supermarkets and a few smaller stores in Greater London, and its first purpose-built store was opened in Bedford in 1963. It brought many ideas from the US, including larger stores with wider aisles and delicatessens, and a much wider range of products.{{cite book |last1=Seth |first1=Andrew |last2=Randall |first2=Geoffrey |title=The Grocers: The Rise and Rise of the Supermarket Chains |date=1999 |publisher=Kogan Page|isbn=0749421916 |page=107 |url=https://books.google.com/books?id=p5mhHtLj7sMC&q=safeway+1962+1963+bedford&pg=PA107 |access-date=24 October 2020}}{{cite web|url=http://www.thenorthernecho.co.uk/archive/2003/10/04/The+North+East+Archive/7013570.Not_the_weakest_link_in_the_chain/ |title=Not the weakest link in the chain |work=The Northern Echo|archive-url=https://web.archive.org/web/20121001213336/http://www.thenorthernecho.co.uk/archive/2003/10/04/The%2BNorth%2BEast%2BArchive/7013570.Not_the_weakest_link_in_the_chain/ |archive-date=1 October 2012 }} By 1987, it had 133 shops around the United Kingdom.Andrew Seth and Geoffrey Randall [https://books.google.com/books?id=p5mhHtLj7sMC&dq=Safeway+1987+133+stores&pg=PA108 The Grocers] {{webarchive|url=https://web.archive.org/web/20131103050810/https://books.google.co.uk/books?id=p5mhHtLj7sMC&pg=PA108&lpg=PA108&dq=Safeway%201987%20133%20stores&source=bl&ots=lKYeB0rf4Q&sig=UXD2Ws4dPvStXajQoEx06qUmHwI&hl=en&ei=ns1wSovSBsOfjAe1vOCWDA&sa=X&oi=book_result&ct=result&resnum=1 |date=3 November 2013 }}, London and Dover, New Hampshire: Kogan, 2001, p.108

File:Safeway in UK.jpg in 2003]]

In 1987, Safeway Inc. put Safeway Food Stores up for sale. Argyll Foods eventually secured it for the sum of £681 million, with £600 million raised through a rights issue that was three times oversubscribed.{{cite web|first=Geoffrey |last=Owen |url=http://cep.lse.ac.uk/seminarpapers/24-05-04%20-%20Background%20paper%20by%20Geoffrey%20Owen.pdf |title=Corporate Strategy in UK Food Retailing 1980–2002| page=8 |archiveurl=https://web.archive.org/web/20090327104434/http://cep.lse.ac.uk/seminarpapers/24-05-04%20-%20Background%20paper%20by%20Geoffrey%20Owen.pdf |archivedate=27 March 2009 }} The merger of Argyll and Safeway was hailed by commentators as one of the most successfully integrated retail combinations in the United Kingdom, bringing together Argyll's experienced management team, with a strong but somewhat underdeveloped retail brand.

Argyll then began converting the larger Presto supermarkets to the Safeway brand. The Presto name continued on smaller supermarkets in North East England and Scotland for several years and even enjoyed a brief revival in the early 1990s, when several new Presto shops began to open and a range of Presto own label products was introduced. The last new Presto shops opened in 1995. The revival was short lived, as in 1995, many smaller Presto shops were sold to a consortium of SPAR retailers.{{cite web |title=Argyll sale of 151 stores to Spar nets pounds 20m |newspaper=The Independent|location=London |date=31 August 1994 |last=Connon |first=Heather |url=http://www.highbeam.com/doc/1P2-4671608.html |archive-url=https://web.archive.org/web/20121022125425/http://www.highbeam.com/doc/1P2-4671608.html |archive-date=22 October 2012 }}

Over the next few years, competitive pressures intensified. Pre tax profits fell by 13% during the year ended 30 April 1994, prompting a wide-ranging strategic review known as "Safeway 2000", led by the then chief executive, Colin Smith, with assistance from McKinsey Consulting.{{cite web|url=http://cep.lse.ac.uk/seminarpapers/24-05-04%20-%20Background%20paper%20by%20Geoffrey%20Owen.pdf |archive-url=https://web.archive.org/web/20040721174741/http://cep.lse.ac.uk/seminarpapers/24-05-04%20-%20Background%20paper%20by%20Geoffrey%20Owen.pdf |archive-date=21 July 2004 |title=Corporate Strategy in UK Food Retailing 1980–2002 |first=Geoffrey |last=Owen |date=February 2013 |page=18 |access-date=22 December 2015}} This involved the sale of the Lo-Cost chain to Co-operative Retail Services and the redesign of Safeway shops to appeal to the family shopper.{{cite book|url=https://books.google.com/books?id=pOGUwwvaZo8C&q=%22Safeway+2000%22&pg=PA724|title=Market-led Strategic Change|first=Nigel |last=Piercy|page=724|publisher=Butterworth-Heinemann|date=2002|isbn=9780750652254|access-date=22 December 2015}}{{cite news|url=https://www.independent.co.uk/news/business/argyll-unloads-101-locost-stores-1441625.html|title=Argyll unloads 101 Lo-Cost stores|newspaper=The Independent|date=7 October 1994}}

In July 1996, Argyll conducted a share buyback and renamed itself Safeway plc.{{cite web|date=18 July 2012|title=Argyll Group PLC Intends a Stock Buyback|url=http://www.alacrastore.com/storecontent/Thomson_M&A/Argyll_Group_PLC_intends_a_stock_buyback-563190040|archive-url=https://archive.today/20120718200205/http://www.alacrastore.com/storecontent/Thomson_M&A/Argyll_Group_PLC_intends_a_stock_buyback-563190040|archive-date=18 July 2012|website=archive.is}} During 1997, several Presto stores were converted to Safeways, and by the beginning of 1998, the final Presto shops were either converted or closed down.{{cite web|title=Safeway to close 44 shops|url=http://findarticles.com/p/articles/mi_qn4158/is_19980225/ai_n14148784|archive-url=https://web.archive.org/web/20160104181203/http://findarticles.com/p/articles/mi_qn4158/is_19980225/ai_n14148784|archive-date=4 January 2016|access-date=5 January 2021}} All shops traded simply as Safeway, regardless of size.

David Webster, who had taken over as chairman in 1997, after the retirement of Alistair Grant, decided to open merger talks with Asda. These talks were called off after a few weeks following a leak to a Sunday newspaper, and then briefly revived in the early months of 1998, before breaking down again.{{cite web|title=Safeway denies restarting talks|url=http://findarticles.com/p/articles/mi_qn4158/is_/ai_n14138914|archive-url=https://web.archive.org/web/20160104181203/http://findarticles.com/p/articles/mi_qn4158/is_/ai_n14138914|archive-date=4 January 2016|access-date=5 January 2021}}

The outcome, if the negotiations had been successful, would probably have been the disappearance of the Safeway name and the emergence of a stronger Asda, still focussing on discount prices, but with a bigger volume to support it. This might have achieved a more secure future for Safeway, than continuing the struggle to keep up with Tesco and Sainsbury's.

Safeway was the first of the large supermarket groups to introduce a loyalty card, which it launched in 1995 and called ABC (Added Bonus Card).{{cite web|title=UK Business Park – Safeway|url=http://www.ukbusinesspark.co.uk/safewaya.htm|archive-url=https://web.archive.org/web/20081011000902/http://www.ukbusinesspark.co.uk/safewaya.htm|archive-date=11 October 2008|access-date=5 January 2021}} As this was initially only introduced into selected shops on a trial basis, Tesco is able to claim the title for the first nationwide introduction of a loyalty card, with Clubcard.

Safeway, in 1999, started a rail container flow carrying goods to its far north shops, some as far as Inverness, Nairn, Elgin and Buckie. The train consisted of van wagons and containers. The train was operated by EWS.[http://www.fofnl.org.uk/newsletters/0299/029912.html Food chain switches to let train take the strain] {{webarchive |url=https://web.archive.org/web/20161016013006/http://www.fofnl.org.uk/newsletters/0299/029912.html |date=16 October 2016 }} Press and Journal, 24 November 1998

By early 1999 Safeway was coming under renewed criticism from investors. Its shares had under-performed in the food sector over the previous five years. It had been pushed back into fourth position by Asda and it did not have enough shops of adequate size to offer a comprehensive non-food range. In July 1999, Safeway announced the appointment of a new chief executive, Carlos Criado-Perez, who had held senior posts in Wal-Mart's international division.{{cite news|url=https://www.theguardian.com/business/2001/nov/25/theobserver.observerbusiness16|title=Safeway dances to Latin beat|first=Sarah |last=Ryle|date=25 November 2001|newspaper=The Guardian|access-date=22 December 2015}}

The problem was how to distinguish Safeway from Tesco and Sainsbury's, and how to minimise its scale disadvantage. According to estimates made by the Competition Commission, Tesco was able to negotiate significantly lower prices from its suppliers than Safeway – averaging about 3% on big selling branded items.{{usurped|1=[https://web.archive.org/web/20120207233855/http://www.competition-commission.org.uk/rep_pub/reports/2000/fulltext/446c11.pdf Competition Commission, Supermarkets, Vol 2, pages 247–249]}}

Criado-Perez's response was to introduce selective deep discounting, the so-called high/low pricing formula, which was later branded as 'substantially discredited' by Morrisons management, making deep price cuts on a limited set of products for a limited period.{{cite news|url=http://news.bbc.co.uk/1/hi/business/829080.stm|title=Safeway sales rise|date=11 July 2000|work=BBC News|access-date=22 December 2015}} Criado-Perez also abandoned Safeway's loyalty card, arguing that these cards were no longer an effective marketing tool. This project was branded 'New Safeway'.{{cite web|url=http://findarticles.com/p/articles/mi_m0DQA/is_2002_May_23/ai_86826718/|archive-url=https://archive.today/20120709024225/http://findarticles.com/p/articles/mi_m0DQA/is_2002_May_23/ai_86826718/|title=Safeway profits rise, but starts 2002 with slow sales – Food Retailin…|date=9 July 2012|archive-date=9 July 2012|website=archive.is}}

The new approach to pricing was one of the four pillars of Safeway's strategy, the others being "Best for Fresh Foods", "Best for Customer Service" and "Best for Product Availability". Criado-Perez envisaged a five-year programme of developing the shops along these lines, to be completed by 2004.

In 2002, Safeway was the fourth largest supermarket chain by sales in the United Kingdom.{{cite web|title=Corporate Strategy in UK Food Retailing 1980–2002 by Geoffrey Owen, Page 2|url=http://cep.lse.ac.uk/seminarpapers/24-05-04%20-%20Background%20paper%20by%20Geoffrey%20Owen.pdf|archive-url=https://web.archive.org/web/20080227193609/http://cep.lse.ac.uk/seminarpapers/24-05-04%20-%20Background%20paper%20by%20Geoffrey%20Owen.pdf|archive-date=27 February 2008|access-date=5 January 2021}} It was growing more slowly than other large chains in the United Kingdom and this was reflected in a share price below the values of the group's assets, leading to the various takeover rumours that circulated during 2002, indicating the City was unconvinced with the Criado-Perez strategy.

{{multiple image

| direction = vertical

| image1 = Safeway Superstore, Bude - geograph.org.uk - 18245.jpg

| caption1 = A larger Safeway supermarket in Bude, Cornwall in 2005, after the purchase of the chain by Morrisons.

| image2 = Morrisons supermarket car park, Bude (geograph 4917147).jpg

| caption2 = The same building in 2016, now as a branch of Morrisons.

}}

On 9 January 2003, the much smaller Morrisons, with around 119 shops largely located in the North of England, made a surprise offer to purchase the chain, offering 1.32 new shares of Morrisons for each share of Safeway, with the co-operation of the Safeway board. This served to start a stampede of other potential buyers. Sainsbury's, Asda, KKR (the company which helped finance the sale of Safeway to Argyll in 1987), Trackdean Investments Limited (controlled by Philip Green, owner of BHS and Arcadia) and Tesco all said they were considering making offers.{{cite news|url=https://www.telegraph.co.uk/finance/2841259/Defiant-Morrison-fights-to-stay-in-Safeway-hunt.html|title=Defiant Morrison fights to stay in Safeway hunt|first=Kate |last=Rankine|date=31 January 2003|newspaper=The Daily Telegraph|access-date=22 December 2015}}

They were all asked to make submissions to the Office of Fair Trading (OFT) for approval under the Fair Trading Act 1973. On 23 January, Safeway's board dropped its recommendation of the Morrisons offer. KKR later dropped its proposal. On 19 March, the remaining proposals except for Trackdean's (which was said to raise no competition issues) were referred to the Competition Commission by the Trade and Industry Secretary, Patricia Hewitt. The report of the Competition Commission was made public on 26 September.

A takeover of Safeway by Sainsbury's, Asda or Tesco was "expected to operate against the public interest, and should be prohibited". However, a takeover by Morrisons was held to be acceptable on the condition that 53 shops of the combined operation be sold, due to local competition issues. Patricia Hewitt accepted these recommendations.{{cite news|url=https://query.nytimes.com/gst/fullpage.html?res=9F05E4D7123DF934A1575AC0A9659C8B63|title=Britain Blocks Big Chains From Taking Over Safeway|newspaper=New York Times|date=27 September 2003|access-date=22 December 2015}}

Philip Green announced on 30 October that he was not proceeding with a takeover bid, on the basis that it was not clear whether approval could be obtained to sell off individual shops to other chains. On 15 December, Morrisons, the only remaining bidder, made a new offer of one share of Morrisons, plus sixty pence for each Safeway share, again with the co-operation of the Safeway board.{{cite web|url=https://www.telegraph.co.uk/finance/2871906/Wm-Morrison-tables-3bn-bid-for-Safeway.html|title=Wm Morrison tables £3bn bid for Safeway|first=Kate |last=Rankine|date=16 December 2003|work=Telegraph.co.uk|access-date=22 December 2015}} On 11 February 2004, shareholders of both Wm Morrison and Safeway voted to approve the merger of the two companies, subject to the result of two High Court rulings later in the month.

Originally, 52 shops were to be compulsorily divested after the takeover, but this was reduced to 50 after one shop in Sunderland burned down and the lease ended on another in Leeds city centre. John Lewis Partnership purchased 19 to be part of its Waitrose chain,{{cite news|url=http://news.bbc.co.uk/1/hi/business/3566925.stm|title=Waitrose snaps up Safeway stores|date=25 March 2004|work=BBC News|access-date=22 December 2015}} while Sainsbury's purchased a further 14 ,{{cite news|url=https://www.theguardian.com/business/2004/may/15/supermarkets|title=Struggling Sainsbury's buys Morrisons stores|first=Julia |last=Finch|date=15 May 2004|newspaper=The Guardian|access-date=22 December 2015}} and Tesco bought 10 in October 2004.{{cite web|title=UK Business Park|url=http://www.ukbusinesspark.co.uk/mos92303.htm|archive-url=https://web.archive.org/web/20110928044738/http://www.ukbusinesspark.co.uk/mos92303.htm|archive-date=28 September 2011|access-date=5 January 2021}}

Unlike other operators, most notably Tesco, Sainsbury's and the Co-op, Morrisons had chosen not to move into the convenience shop sector. Further to this policy decision, it was announced in October 2004 that the 114 smaller shops of Safeway Compact were to be sold off to rival supermarket chain Somerfield, in a two part deal worth £260.2 million in total.{{cite news|url=http://news.bbc.co.uk/1/hi/business/3950219.stm|title=Morrisons sells 114 Safeway shops|date=25 October 2004|work=BBC News|access-date=22 December 2015}}

In Northern Ireland, Morrisons sold former Safeway shops to Asda. These included a shop in Bangor, which actually opened after the takeover by Morrisons, in June 2005.{{cite news|url=https://www.theguardian.com/business/2005/jun/06/supermarkets.asda|title=Asda moves into Northern Ireland|first=Mark |last=Tran|date=6 June 2005|newspaper=The Guardian|access-date=22 December 2015}}

Morrisons continued to sell and close shops not covered by the Competition Commission ruling, which it felt did not fit with the scale and layout of its format of Market Street. In total, 254 shops were sold off by October 2005, which left the chain with around 367 shops by November 2005. In all, seventy two shops were sold that were neither part of the original Competition Commission ruling nor part of the Safeway Compact portfolio.

One of the largest single purchases in 2005 was that of five shops by Waitrose in August.{{cite news|url=https://www.theguardian.com/business/2005/aug/12/supermarkets|title=Waitrose adds five ex-Safeway stores to empire|first=Simon |last=Bowers|date=12 August 2005|newspaper=The Guardian|access-date=22 December 2015}} On 18 July 2005, a further six shops were sold to Waitrose, including the former Safeway shop in Hexham, Northumberland, which became the most northerly Waitrose branch in England.{{cite web|url=http://findarticles.com/p/articles/mi_qn4158/is_20060718/ai_n16538251|archive-url=https://web.archive.org/web/20080920114625/http://findarticles.com/p/articles/mi_qn4158/is_20060718/ai_n16538251|archive-date=20 September 2008|title=Business News IN BRIEF: Waitrose buys stores from rival Wm Morrisons – Independent, The (London) – Find Articles at BNET|date=20 September 2008}}

In May 2005, Morrisons announced the termination of Safeway's joint-venture forecourt shop/petrol station format with BP. Under the deal, the premises were split 50/50 between the two companies.{{cite web|title=UK Business Park|url=http://www.ukbusinesspark.co.uk/bpaaaaaa.htm|archive-url=https://web.archive.org/web/20110928044801/http://www.ukbusinesspark.co.uk/bpaaaaaa.htm|archive-date=28 September 2011|access-date=5 January 2021}} Five sites were subsequently sold on to BP, while Morrisons sold the rest of its sites to Somerfield and Tesco, which both maintain a presence in this market sector. Following the termination of the BP/Safeway deal, BP began to roll out Marks and Spencer food forecourt shops in their place from 2005, with the network expanding over subsequent years.[https://www.conveniencestore.co.uk/news/mands-ties-in-with-bp/188714.article Convenience Store, c.2005][https://www.talkingretail.com/news/industry-news/ms-re-affirms-forecourt-partnership-with-bp-14-01-2022/ Talking Retail, January 2020]

Morrisons also sold Safeway's Channel Islands shops, in Guernsey and Jersey, to CI Traders, where they continued to trade under the Safeway brand name, despite selling products from chains such as Iceland.{{usurped|1=[https://web.archive.org/web/20110524055034/http://www.thisisjersey.com/2005/04/30/ci-traders-buy-safeway/ CI Traders buy Safeway]}} In February 2011, CI Traders sold the Safeway shops on the Channel Islands to Waitrose and the Safeway brand disappeared from the Channel Islands.{{cite web|title=SandpiperCI to sell its Checkers and Safeway supermarkets to Waitrose|url=http://www.sandpiperci.com/news/sandpiperci-to-sell-its-checkers-and-safeway-supermarkets-to-waitrose|archive-url=https://web.archive.org/web/20150121060028/http://www.sandpiperci.com/news/sandpiperci-to-sell-its-checkers-and-safeway-supermarkets-to-waitrose|archive-date=21 January 2015|access-date=5 January 2021}}

On the Isle of Man, the Douglas shop was sold to Shoprite and the Ramsey shop was sold to the Co-op.{{cite web|title=Morrisons pull out of Isle of Man|url=http://findarticles.com/p/articles/mi_hb5245/is_200504/ai_n19849386|archive-url=https://web.archive.org/web/20160104181203/http://findarticles.com/p/articles/mi_hb5245/is_200504/ai_n19849386|archive-date=4 January 2016|access-date=5 January 2021|website=Find Articles}} The shop in Gibraltar was originally marketed for sale, but was then converted. In November 2005, plans were submitted for the extension and redevelopment of the shop, in order to introduce the full Morrisons format.{{cite web|url=http://www.foghs.org.uk/nl/78.pdf |title=Welcome |work=Friends of Gibraltar Heritage Society |archive-url=https://web.archive.org/web/20081201130716/http://www.foghs.org.uk/nl/78.pdf |archive-date=1 December 2008 }}

In September 2005, the company announced the closure of former Safeway depots in Kent, Bristol and Warrington, with the loss of around 2,500 jobs.{{cite news|url=http://news.bbc.co.uk/1/hi/england/4249872.stm|title=Morrisons staff announce walk-out|date=15 September 2005|work=BBC News|access-date=22 December 2015}} The Kent depot was later sold to Waitrose, whilst the Warrington depot was sold to Iceland. Part of the Bristol depot was sold off to Gist.[http://www.dematic.co.uk/presse/_admin/press_uk/DEMUK070201/DEMUK070201_EN.pdf?PHPSESSID=a9afdfd7b88a6fde761356c646dae218 Dematic]{{dead link|date=November 2016 |bot=InternetArchiveBot |fix-attempted=yes }} The shop conversion process was completed on 24 November 2005, when the last Safeway fascia disappeared from the United Kingdom.{{cite news|url=http://news.bbc.co.uk/1/hi/business/4463882.stm|title=Safeway disappears after 43 years|date=23 November 2005|work=BBC News|access-date=22 December 2015}}

In November 2016, Morrisons announced a revival of the Safeway brand, on food products that it manufactures for retailers.{{cite news|title=Morrisons to revive Safeway brand name|url=https://www.bbc.co.uk/news/business-38066990|access-date=22 November 2016|work=BBC News}} This was followed by McColl's signing an agreement to stock Safeway-branded products in its nationwide chain of small-format convenience stores in August 2017.{{cite news|title=McColl's agrees groundbreaking new supply chain partnership with Morrisons|url=https://www.mccolls.co.uk/media/29026096/20170801_mccolls_rns_final.pdf|access-date=10 August 2017|publisher=McColl's Retail Group}}

A trial of a branded Safeway Daily convenience store was unveiled at a petrol station forecourt in Derby during 2019,{{cite news|title=The UK's first Safeway Daily store is opening in Derby tomorrow|url=https://www.derbytelegraph.co.uk/news/derby-news/uks-first-safeway-daily-store-2569253|access-date=2 July 2023|work=Derbyshire Live|first=Ben |last=Lyons}} but the location did not retain the brand long term.

• "A little bit more" (used until the late 1980s)
• "Everything you want from a store and a little bit more" (late 1980s-1991)
• "Where good value comes naturally" (1991–1995)
• "Lightening the load" (1995–1999)
• "More reasons to shop at Morrisons & Safeway" (Morrisons acquisition, 2004–2005)

• List of supermarket chains in the United Kingdom

{{clear}}

{{Reflist}}

{{Commons category|Safeway (UK)}}

• [https://www.safeway.co.uk Safeway website]
• [https://web.archive.org/web/20040611183021/http://www.safeway.co.uk/ – Safeway website – Archive from 2004]
• [https://web.archive.org/web/20110607214732/http://production.investis.com/safewayplc/whatsnew Safeway plc Archive Website]
• [https://web.archive.org/web/20120205141702/http://production.investis.com/safewayplc/reports/annrep03/findus.pdf A store list from May 2003, showing all the branches operated by Safeway before the takeover – Archive]
• [https://web.archive.org/web/20120205141709/http://production.investis.com/safewayplc/reports/2002-05-15/ar2002.pdf The last annual report to shareholders, as an independent company before the firm takeover speculation, the Safeway plc Annual Report and Accounts 2002 – Archive]
• [https://web.archive.org/web/20120205141756/http://production.investis.com/safewayplc/reports/annrep03/annrep03.pdf The Safeway plc Annual Report and Accounts 2003 – Archive]

{{Albertsons Companies|No Collapse}}

{{Defunct UK grocers}}

{{Authority control}}

{{DEFAULTSORT:Safeway (Uk)}}

Category:Safeway Inc.

Category:Defunct supermarkets of the United Kingdom

Category:Defunct companies based in London

Category:British companies established in 1962

Category:Retail companies established in 1962

Category:Retail companies disestablished in 2005

Category:Companies formerly listed on the London Stock Exchange