Expansion still on Safeway agenda

Safeway is to continue its store opening and refurbishment programme, despite the fact that it is unlikely to remain an independent business.

The grocer, which is being circled by Wal-Mart, Tesco, Morrisons, Sainsbury's and Philip Green, will open its first 'Mark III' megastore in Reading next month and has recently opened two convenience stores in Glasgow and Edinburgh.

Director of communications Kevin Hawkins said that the refurbishment and extension programme had slowed in the final quarter of the financial year, but is to be stepped up again. 'As from April 1 we will be going ahead with our new store, development and extension plans. The new hypermarket will be a step on from the last one. We have learnt lessons that will be brought through in design and staffing and profitability should come through much quicker.'

Numis retail analyst Mark Hughes said: 'It's sensible (for Safeway to continue store openings). Whoever wins Safeway will want to open more space anyway. It is also an insurance policy against the worse case scenario - that the Competition Commission will let nothing go through.'

- The potential bidders for Safeway met Office of Fair Trading officials on Tuesday, ahead of its merger panel meeting next week. The suitors are understood to have made their cases on issues such as competition on a national level and effects on consumer choice at a local level.