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Safeway is a British brand owned chain of
supermarket A supermarket is a self-service Retail#Types of outlets, shop offering a wide variety of food, Drink, beverages and Household goods, household products, organized into sections. This kind of store is larger and has a wider selection than earli ...
s and
convenience shop A convenience store, convenience shop, corner store or corner shop is a small retail business that stocks a range of everyday items such as coffee, groceries, snack foods, confectionery, soft drinks, ice creams, tobacco products, lottery tick ...
s. Founded in 1962 by the American
Safeway Inc. Safeway is an American supermarket chain founded by Marion Barton Skaggs in April 1915 in American Falls, Idaho. The chain provides grocery items, food and general merchandise and features a variety of specialty departments, such as bakery, d ...
, before being sold to
Argyll Foods 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 Saf ...
in 1987. It was later listed on the
London Stock Exchange London Stock Exchange (LSE) is a stock exchange in the City of London, England, United Kingdom. , the total market value of all companies trading on LSE was £3.9 trillion. Its current premises are situated in Paternoster Square close to St Pau ...
. It was purchased by
Morrisons Wm Morrison Supermarkets, 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, as well as one in Gibraltar. The company is headqua ...
in March 2004. Most of its 479 shops were rebranded as Morrisons, with others being sold. The brand 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


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 Bedford is a market town in Bedfordshire, England. At the 2011 Census, the population of the Bedford built-up area (including Biddenham and Kempston) was 106,940, making it the second-largest settlement in Bedfordshire, behind Luton, whilst t ...
in 1963. It brought many ideas from the US, including larger stores with wider aisles and delicatessens, and a much wider range of products. By 1987, it had 133 shops around the United Kingdom.


Acquisition by Argyll Foods

In 1987, Safeway Inc. put Safeway Food Stores up for sale.
Argyll Foods 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 Saf ...
eventually secured it for the sum of £681m, with £600m raised through a
rights issue A rights issue or rights offer is a dividend of subscription rights to buy additional securities in a company made to the company's existing security holders. When the rights are for equity securities, such as shares, in a public company, it can b ...
that was three times oversubscribed. 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 North East England is one of nine official regions of England at the first level of ITL for statistical purposes. The region has three current administrative levels below the region level in the region; combined authority, unitary authority ...
and
Scotland Scotland (, ) is a country that is part of the United Kingdom. Covering the northern third of the island of Great Britain, mainland Scotland has a border with England to the southeast and is otherwise surrounded by the Atlantic Ocean to th ...
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 SPAR, originally DESPAR, styled as DE SPAR, is a Dutch multinational that provides branding, supplies and support services for independently owned and operated food retail stores. It was founded in the Netherlands in 1932, by Adriaan van Well, ...
retailers. 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 A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
, Colin Smith, with assistance from McKinsey Consulting. This involved the sale of the Lo-Cost discount operation and the redesign of Safeway shops to appeal to the family shopper. In July 1996, Argyll conducted a
share buyback Share repurchase, also known as share buyback or stock buyback, is the re-acquisition by a company of its own shares. It represents an alternate and more flexible way (relative to dividends) of returning money to shareholders. When used in coord ...
and renamed itself Safeway plc. 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. 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 Asda Stores Ltd. () (often styled as ASDA) is a British supermarket chain. It is headquartered in Leeds, England. The company was founded in 1949 when the Asquith family merged their retail business with the Associated Dairies company of Yorks ...
. 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. 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 Asda Stores Ltd. () (often styled as ASDA) is a British supermarket chain. It is headquartered in Leeds, England. The company was founded in 1949 when the Asquith family merged their retail business with the Associated Dairies company of Yorks ...
, 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 Tesco plc () is a British Multinational corporation, 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 an ...
and
Sainsbury's J Sainsbury plc, trading as Sainsbury's, is the second largest chain of supermarkets in the United Kingdom, with a 14.6% share of UK supermarket sales. Founded in 1869 by John James Sainsbury with a shop in Drury Lane, London, the company wa ...
. 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). 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 Tesco Clubcard (commonly referred to and branded as Clubcard) is the loyalty card of British supermarket chain Tesco. The Clubcard scheme operates in the United Kingdom, Ireland, Czech Republic, Slovakia, Hungary and several other countries. ...
. Safeway, in 1999, started a rail container flow carrying goods to its far north shops, some as far as
Inverness Inverness (; from the gd, Inbhir Nis , meaning "Mouth of the River Ness"; sco, Innerness) is a city in the Scottish Highlands. It is the administrative centre for The Highland Council and is regarded as the capital of the Highlands. Histori ...
,
Nairn Nairn (; gd, Inbhir Narann) is a town and royal burgh in the Highland council area of Scotland. It is an ancient fishing port and market town around east of Inverness, at the point where the River Nairn enters the Moray Firth. It is the tra ...
, Elgin and
Buckie Buckie ( gd, Bucaidh) is a burgh town (defined as such in 1888) on the Moray Firth coast of Scotland. Historically in Banffshire, Buckie was the largest town in the county until the administrative area was abolished in 1975. The town is the ...
. The train consisted of van wagons and containers. The train was operated by EWS.


"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 Asda Stores Ltd. () (often styled as ASDA) is a British supermarket chain. It is headquartered in Leeds, England. The company was founded in 1949 when the Asquith family merged their retail business with the Associated Dairies company of Yorks ...
and it did not have enough shops of adequate size, to offer a comprehensive non food range. In July 1999, Safeway announced the appointment a new chief executive, Carlos Criado-Perez, who had held senior posts in Wal-Mart's international division. 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 The Competition Commission was a non-departmental public body responsible for investigating mergers, markets and other enquiries related to regulated industries under competition law in the United Kingdom. It was a competition regulator under t ...
, Tesco was able to negotiate significantly lower prices from its suppliers than Safeway – averaging about 3% on big selling branded items. 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. 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'. 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. 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

On 9 January 2003, the much smaller
Morrisons Wm Morrison Supermarkets, 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, as well as one in Gibraltar. The company is headqua ...
, with around 119 shops largely located in the
North of England Northern England, also known as the North of England, the North Country, or simply the North, is the northern area of England. It broadly corresponds to the former borders of Angle Northumbria, the Anglo-Scandinavian Kingdom of Jorvik, and the ...
, 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 J Sainsbury plc, trading as Sainsbury's, is the second largest chain of supermarkets in the United Kingdom, with a 14.6% share of UK supermarket sales. Founded in 1869 by John James Sainsbury with a shop in Drury Lane, London, the company wa ...
,
Asda Asda Stores Ltd. () (often styled as ASDA) is a British supermarket chain. It is headquartered in Leeds, England. The company was founded in 1949 when the Asquith family merged their retail business with the Associated Dairies company of Yorks ...
, KKR (the company which helped finance the sale of Safeway to Argyll in 1987), Trackdean Investments Limited (controlled by
Philip Green Sir Philip Nigel Ross Green (born 15 March 1952) is a British businessman who was the chairman of the retail company the Arcadia Group. He owned the high street clothing retailers Topshop, Topman and Miss Selfridge from 2002 to 2020. As of M ...
, owner of BHS and Arcadia) and
Tesco Tesco plc () is a British Multinational corporation, 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 an ...
all said they were considering making offers. They were all asked to make submissions to the
Office of Fair Trading , type = Non-ministerial government department , nativename = , nativename_a = , nativename_r = , logo = Office of Fair Trading (United Kingdom) (logo).png , logo_width = 255px , logo_caption = , seal = , seal_width = , seal_caption = , ...
(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 The Competition Commission was a non-departmental public body responsible for investigating mergers, markets and other enquiries related to regulated industries under competition law in the United Kingdom. It was a competition regulator under t ...
by the Trade and Industry Secretary,
Patricia Hewitt Patricia Hope Hewitt (born 2 December 1948) is an Australian-born British government adviser and former politician who served as Secretary of State for Health from 2005 to 2007. A member of the Labour Party, she previously served as Secreta ...
. 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 fifty three shops of the combined operation be sold, due to local competition issues.
Patricia Hewitt Patricia Hope Hewitt (born 2 December 1948) is an Australian-born British government adviser and former politician who served as Secretary of State for Health from 2005 to 2007. A member of the Labour Party, she previously served as Secreta ...
accepted these recommendations.
Philip Green Sir Philip Nigel Ross Green (born 15 March 1952) is a British businessman who was the chairman of the retail company the Arcadia Group. He owned the high street clothing retailers Topshop, Topman and Miss Selfridge from 2002 to 2020. As of M ...
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. 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 Sunderland () is a port city in Tyne and Wear, England. It is the City of Sunderland's administrative centre and in the historic county of Durham. The city is from Newcastle-upon-Tyne and is on the River Wear's mouth to the North Sea. The ri ...
burned down and the lease ended on another in the
Leeds city centre Leeds city centre is the central business district of Leeds, West Yorkshire, England. It is roughly bounded by the Inner Ring Road to the north and the River Aire to the south and can be divided into several quarters. Central districts A ...
.
John Lewis Partnership The John Lewis Partnership plc (JLP) is a British company which operates John Lewis & Partners department stores, Waitrose & Partners supermarkets, its banking and financial services, and other retail-related activities. The privately held comp ...
purchased 19 to be part of its
Waitrose Waitrose & Partners (formally Waitrose Limited) 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 sel ...
chain, while
Sainsbury's J Sainsbury plc, trading as Sainsbury's, is the second largest chain of supermarkets in the United Kingdom, with a 14.6% share of UK supermarket sales. Founded in 1869 by John James Sainsbury with a shop in Drury Lane, London, the company wa ...
purchased a further 14 , and
Tesco Tesco plc () is a British Multinational corporation, 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 an ...
bought 10 in October 2004. Unlike other operators, most notably Tesco, Sainsbury's and the Co-op, Morrisons had chosen not to move into the
convenience shop A convenience store, convenience shop, corner store or corner shop is a small retail business that stocks a range of everyday items such as coffee, groceries, snack foods, confectionery, soft drinks, ice creams, tobacco products, lottery tick ...
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 Somerfield (; originally Gateway) 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-operati ...
, in a two part deal worth £260.2 million in total. In
Northern Ireland Northern Ireland ( ga, Tuaisceart Éireann ; sco, label= Ulster-Scots, Norlin Airlann) is a part of the United Kingdom, situated in the north-east of the island of Ireland, that is variously described as a country, province or region. Nort ...
, Morrisons sold former Safeway shops to Asda. These included a shop in Bangor, which actually opened after the takeover by Morrisons, in June 2005. 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. On 18 July 2005, a further six shops were sold to Waitrose, including the former Safeway shop in
Hexham Hexham ( ) is a market town and civil parish in Northumberland, England, on the south bank of the River Tyne, formed by the confluence of the North Tyne and the South Tyne at Warden nearby, and close to Hadrian's Wall. Hexham was the administra ...
,
Northumberland Northumberland () is a county in Northern England, one of two counties in England which border with Scotland. Notable landmarks in the county include Alnwick Castle, Bamburgh Castle, Hadrian's Wall and Hexham Abbey. It is bordered by land o ...
, which became the most northerly Waitrose branch in England. 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. 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 Marks and Spencer Group plc (commonly abbreviated to M&S and colloquially known as Marks's or Marks & Sparks) is a major British multinational retailer with headquarters in Paddington, London that specialises in selling clothing, beauty, home ...
food forecourt shops in their place from 2005, with the network expanding over subsequent years. Morrisons also sold Safeway's
Channel Islands The Channel Islands ( nrf, Îles d'la Manche; french: îles Anglo-Normandes or ''îles de la Manche'') are an archipelago in the English Channel, off the French coast of Normandy. They include two Crown Dependencies: the Bailiwick of Jersey ...
shops, in
Guernsey Guernsey (; Guernésiais: ''Guernési''; french: Guernesey) is an island in the English Channel off the coast of Normandy that is part of the Bailiwick of Guernsey, a British Crown Dependency. It is the second largest of the Channel Islands, ...
and
Jersey Jersey ( , ; nrf, Jèrri, label=Jèrriais ), officially the Bailiwick of Jersey (french: Bailliage de Jersey, links=no; Jèrriais: ), is an island country and self-governing Crown Dependency near the coast of north-west France. It is the la ...
, to CI Traders, where they continued to trade under the Safeway brand name, despite selling products from chains such as
Iceland Iceland ( is, Ísland; ) is a Nordic island country in the North Atlantic Ocean and in the Arctic Ocean. Iceland is the most sparsely populated country in Europe. Iceland's capital and largest city is Reykjavík, which (along with its s ...
. In February 2011, CI Traders sold the Safeway shops on the Channel Islands to Waitrose and the Safeway brand disappeared from the Channel Islands. On the
Isle of Man ) , anthem = "O Land of Our Birth" , image = Isle of Man by Sentinel-2.jpg , image_map = Europe-Isle_of_Man.svg , mapsize = , map_alt = Location of the Isle of Man in Europe , map_caption = Location of the Isle of Man (green) in Europe ...
, the Douglas shop was sold to Shoprite and the Ramsey shop was sold to the
Co-op A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-control ...
. The shop in
Gibraltar ) , anthem = " God Save the King" , song = "Gibraltar Anthem" , image_map = Gibraltar location in Europe.svg , map_alt = Location of Gibraltar in Europe , map_caption = United Kingdom shown in pale green , mapsize = , image_map2 = Gibr ...
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. 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. 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. The shop conversion process was completed on 24 November 2005, when the last Safeway fascia disappeared from the United Kingdom.


Partial brand revival

In November 2016, Morrisons announced a revival of the Safeway brand, on food products that it manufactures for retailers. However, these products would not be sold in Morrisons. Morrisons, which is also the fourth-largest food producer in the United Kingdom, is seeking to utilise more of the capacity within its food manufacturing sites and sees Safeway as the ideal brand to front products for sale through third-party retailers. In August 2017, McColl's signed an agreement to stock Safeway-branded products in its nationwide chain of small-format convenience stores. Items have since gone on sale and a new Safeway website has been launched.


References


External links


Safeway website

- Safeway website - Archive from 2004

Safeway plc Archive Website

A store list from May 2003, showing all the branches operated by Safeway before the takeover - Archive

The last annual report to shareholders, as an independent company before the firm takeover speculation, the Safeway plc Annual Report and Accounts 2002 - Archive

The Safeway plc Annual Report and Accounts 2003 - Archive
{{DEFAULTSORT:Safeway (Uk) Safeway Inc. Defunct supermarkets of the United Kingdom Defunct companies based in London British companies established in 1962 Retail companies established in 1962 Retail companies disestablished in 2005 Companies formerly listed on the London Stock Exchange