LONDON (Brand Republic) 鈥 Supermarket chain Safeway is planning to spend more on revamping its stores, introducing new product ranges, restaurants, dry cleaning and photo processing on the back of strong second-quarter like-for-like sales up 5.1%.
The company said it would reveal strong profits for its half-year results next month, and said it was confident in posting a turnaround in profits for the full year.
Chief executive Carlos Criado-Perez, who stepped in from US giant Wal-Mart last year with a pledge to return the flagging group to profitability, said, 鈥淲e are transforming Safeway -鈥 competing on our own terms. We continue to win more clients, grow sales and are now starting to deliver strong profit recovery.鈥
Criado-Perez started his campaign by cutting prices, axing national advertising to concentrate on local direct mail and -鈥 in a controversial move which industry analysts feared could backfire 鈥- getting rid of Safeway鈥檚 ABC loyalty card scheme. He said at the time that consumers were more interested in continually low prices than a loyalty scheme with minimal benefit.
Analysts said the results would put pressure on Safeway鈥檚 rivals. 鈥淲ith Safeway and Sainsbury鈥檚 now in recovery mode, this must put pressure on Asda and Tesco in particular,鈥 one analyst said.