Losing supermarkets respond to Safeway snub with range of initiatives

Competition among food retailers is likely to intensify following the decision to give Morrisons the go-ahead to bid for Safeway.

Over the past few days supermarket groups have highlighted expanded ranges, property pushes and new ventures, as they demonstrate their faith in the strength of their existing businesses.

Tesco has increased its Finest range by 20 per cent, adding 250 lines across food and non-food. Chief executive Sir Terry Leahy said Tesco 'thrives on competition', and would continue to offer 'the best value for customers.'

Asda insisted it would not be complacent. It pointed to recent initiatives, such as opening mezzanine stores and standalone George outlets.

Sainsbury's refused to comment. However, a source close to the grocer said: 'It is not going to become an EDLP operator, because that is not where it thinks it fits in the market.'

Smaller food retailers are also on the offensive. Iceland is making rapid strides with store openings. The retailer aims to open 80 over the next three years, but is on course to beat that target. In recent months, Iceland has opened five stores and signed contracts for a further 10. It is also in negotiations for an additional 20 outlets.

And the Co-operative Group is considering moving into more product categories, as well as bolstering its online non-food offer.