British grocer Safeway posted a dip in fourth-quarter sales today to defy the market's worst fears but said year profits would be at the low end of forecasts.
The company said business had been affected by the uncertainty surrounding its future and estimated that pre-exceptional pre-tax profit would be around £335 million ($528 million) for the year to March 29th, at the lower end of market forecasts and down from last year.
Safeway, at the centre of a bidding battle between its four main supermarket rivals and retail baron Mr Philip Green, has the difficult task of trying to keep customers, suppliers and staff on side while its future hangs in the balance.
It is trying to limit the effect of the bid process on profits by reducing promotional investment and capital expenditure on store refurbishments and by keeping tight control of costs while retaining key staff through bonus payments.
Safeway reported a 0.1 per cent dip in like-for-like sales for the fourth quarter to March 29th after a 1.1 per cent adjustment for the fact that Easter this year comes in April.
That compares with a 0.1 per cent rise in its third quarter. The company's shares rose 0.4 per cent to 264 pence by 9.25 a.m. Analysts had feared a drop of up to 2 per cent.
Mr Green, owner of BHS and Arcadia fashion stores and the only bidder cleared by the competition authorities to proceed straight away, is lurking on the sidelines, with the prospect of Safeway's take-out price dropping as trade deteriorates.