Safeway Limited is a British groceries brand, and former chain of supermarkets and convenience shops. The British Safeway was founded in 1962 by the American Safeway Inc., before being sold to Argyll Foods in 1987. It was later listed on the London Stock Exchange.[citation needed] It was purchased by Morrisons in March 2004. Most of its 479 shops were rebranded as Morrisons, with others being sold. Safeway-branded shops disappeared from the United Kingdom on 24 November 2005.
In November 2016, Morrisons revived the Safeway brand for a range of products, manufactured in the company's own factories, for distribution through UK independent retailers.
History
A later era Safeway UK logo
Early years
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.[1][2] By 1987, it had 133 shops around the United Kingdom.[3]
In 1987, Safeway Inc. put Safeway Food Stores up for sale. Argyll Foods eventually secured it for the sum of £681million, with £600million raised through a rights issue that was three times oversubscribed.[4] 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.[5]
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.[6] 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.[7][8]
In July 1996, Argyll conducted a share buyback and renamed itself Safeway plc.[9] 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.[10] 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.[11]
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.[6]
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).[12] As this was initially only introduced into selected shops on a trial basis, however, 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.[13]
"New Safeway"
By the early months of 1999, Safeway was coming under renewed criticism from investors. Its shares had under performed 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.[14]
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.[15]
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.[16] Criado-Perez also abandoned Safeway's loyalty card, arguing that these cards were no longer an effective marketing tool.[16] This project was branded 'New Safeway'.[17]
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.[18] However, 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.
Morrisons takeover
A larger Safeway supermarket in Bude, Cornwall in 2005, after the purchase of the chain by Morrisons.
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. However, this served only 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.[19]
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.[20]
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.[21] 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.
Shop disposals
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,[22] while Sainsbury's purchased a further 14 ,[23] and Tesco bought 10 in October 2004.[24]
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.[25]
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.[26]
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.[27] 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.[28]
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.[29] 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.[30][31]
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.[32] In February 2011, CI Traders sold the Safeway shops on the Channel Islands to Waitrose and the Safeway brand disappeared from the Channel Islands.[33]
On the Isle of Man, the Douglas shop was sold to Shoprite and the Ramsey shop was sold to the Co-op.[34] 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.[35]
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.[36] The Kent depot was later sold to upmarket rival Waitrose, whilst the Warrington depot was sold to frozen food rival Iceland. Part of the Bristol depot was sold off to Gist.[37] The shop conversion process was completed on 24 November 2005, when the last Safeway fascia disappeared from the United Kingdom.[38]
Partial brand revival
In November 2016, Morrisons announced a revival of the Safeway brand, on food products that it manufactures for retailers.[39] 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.[40]
A trial of a branded Safeway Daily convenience store was unveiled at a petrol station forecourt in Derby during 2019,[41] but the location did not retain the brand long term.
Slogans
"A little bit more" (used until the late 80s)
"Everything you want from a store and a little bit more" (late 80s-1991)
"Where good value comes naturally" (1991–1995)
"Lightening the load" (1995–1999)
"More reasons to shop at Morrisons & Safeway" (Morrisons acquisition, 2004–2005)
Tesco plc is a British multinational groceries and general merchandise retailer headquartered in Welwyn Garden City, England. In 2011, it was the third-largest retailer in the world measured by gross revenues and the ninth-largest in the world measured by revenues. It has shops in Ireland, the United Kingdom, the Czech Republic, Hungary, and Slovakia. It is the market leader of groceries in the UK.
Wm Morrison Supermarkets Limited, trading as Morrisons, is the fifth largest supermarket chain in the United Kingdom. As of 2021, the company had 497 supermarkets across England, Wales and Scotland, and one in Gibraltar. The company is headquartered in Bradford, England.
Asda Stores Limited, trading as Asda and often styled as ASDA, is a British supermarket chain. Its headquarters are in Leeds, England. The company was incorporated as Associated Dairies and Farm Stores in 1949. It expanded into Southern England during the 1970s and 1980s, and acquired Allied Carpets, 61 large Gateway Supermarkets and other businesses, such as MFI Group. It sold these acquisitions during the 1990s to concentrate on the supermarkets. It was listed on the London Stock Exchange until 1999 when it was acquired by Walmart for £6.7 billion. Asda was the second-largest supermarket chain in the United Kingdom between 2003 and 2014 by market share, at which point it fell into third place.
J Sainsbury plc, trading as Sainsbury's, is a British supermarket and the second-largest chain of supermarkets in the United Kingdom, with a 14.6% share of UK supermarket sales in September 2022.
Waitrose Limited, trading as Waitrose & Partners, is a brand of British supermarkets, founded in 1904 as Waite, Rose & Taylor, later shortened to Waitrose. It was acquired in 1937 by employee-owned retailer John Lewis Partnership, which still sells groceries under the brand. Its head offices are located in Bracknell, Berkshire.
Somerfield was a chain of small to medium-sized supermarkets operating in the United Kingdom. The company also previously owned the Kwik Save chain of discount food stores. The company was taken over by the Co-operative Group on 2 March 2009 in a £1.57 billion deal, creating the UK's fifth-largest food retailer. The Somerfield name was replaced by the Co-operative brand in a rolling programme of store conversions ending in summer 2011.
William Low & Co plc, popularly referred to as Willie Low's and latterly marketed as Wm Low, was a chain of supermarkets headquartered in Dundee, Scotland. Initially founded in 1868, Low's had branches throughout Scotland, North East England, Cumbria and Yorkshire. As a group, it was smaller than most of its competitors and often served small towns, although it still had several large hypermarkets. Low's use to trade on their Scottishness as a unique selling point in Scotland. At one stage, the company also ran a chain of frozen food stores known as Lowfreeze. Lowfreeze was sold in 1987 to Bejam.
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Amos Hinton & Sons plc was a small supermarket company from the North East of England trading as Hintons, it was acquired in a takeover by Argyll Foods in 1984.
Argyll Foods plc was the fourth biggest supermarket operator in the United Kingdom, through its acquisitions of a number of smaller supermarkets. In 1987 the company acquired Safeway Inc.'s UK subsidiary and in 1996 it changed its name to Safeway plc.
Shoprite Limited was a community food store chain in the Isle of Man. It was a wholly owned subsidiary of Isle of Man Enterprises plc, until Tesco announced its purchase of the business on 9 October 2023.
Safeway Stores (Ireland) was a supermarket chain that operated in Northern Ireland between 1996 and 2005. 12 of the 13 stores were acquired by Asda, itself owned by Walmart; whilst the remaining store was sold to Mr John Miskelly and Mrs Helen Miskelly. Despite its name, it did not operate any interests in the Republic of Ireland.
SandpiperCI is a retail and food and beverage operator based in the Channel Islands. It mostly operates franchises of British chain stores, such as Marks & Spencer, Iceland, Morrisons, Costa Coffee, Burger King and Matalan, in British Crown Dependencies and Overseas Territories. It also operates own-brand Checkers stores in Jersey and Guernsey and an Apple retailer called iQ.
SavaCentre was a chain of 13 hypermarkets and later a further seven discount supermarkets owned and operated jointly by Sainsbury's and BHS, beginning in 1977. Sainsbury's later took full control of the stores alone in 1989, rebranding them as Sainsbury's SavaCentre, until 2005 when the stores were integrated into the Sainsbury's supermarket brand. The hypermarket stores ranged in size from 66,000 sq ft (6,100 m2) to 117,000 sq ft (10,900 m2) and the discount supermarkets ranged in size from 31,000 sq ft (2,900 m2) to 70,000 sq ft (6,500 m2). At the time of its inception, it was the only dedicated hypermarket chain in the UK.
Presto Foodmarkets was a chain of supermarkets and convenience stores in Great Britain, which first appeared in the early 1960s. While the fate of most of the chain's stores was conversion to Safeway, the final stores still trading as Presto were either closed or sold in 1998.
Safeway (Channel Islands) was a supermarket chain in the Channel Islands. There were two supermarkets, one in Jersey and one in Guernsey.
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