Loss-maker still pleases shoppers

NEW Morrisons stores are making losses. The supermarket group has admitted that the task of integrating Safeway has been difficult and that these outlets are making a loss.

The company's pre-tax profits fell £10m. to £121.6m. in the half-year to July.

Local customers have some concerns about changing products on the shelves, but are generally pleased with choice and value for money.

'I think the products are good and the vegetables are better since Morrisons took over,' said sales executive Debbie Goulding, 41, a vegetarian.

'They are a lot fresher and are not as expensive.'

Beryl Bichard, 64, who retired last year, said that she and her daughter had found that the Morrisons brand was a lot cheaper, especially the fruit and vegetables, and, in some cases, even tastier.

'They had a very good choice of products and I will keep shopping there. I did think that it was going downhill and that the fresh food was very expensive, but now that Morrisons have brought in their own products, it has made a big difference,' she said.

'Some of their brands, like the cereals, I have found the flavours are better. The meat was a good buy, too, and I think the whole of the store is an improvement.'

Pensioner Joan Harwood, 65, said that she used to like the bargains at Safeway, but added that there were still good deals to look out for now and the change had not really worried her.

Hairdresser Felicity Rothery, 56, agreed: 'If you stick with the Morrisons products, then it is cheaper.

'There is less choice, though, and they aren't doing a lot of products they did before.

'It is certainly busy, though, and the takeover does not seem to have stopped people going.'

Visitors Vic and Val Cross, who have also seen their Safeway store in Surrey taken over by Morrisons, said that it was still early days.

'They did make quite a few improvements in our shop, but the aisles, like the shop here in Guernsey, aren't well split up and I feel like they are manipulating you into every aisle.

'I also don't like the bags, which are very light and not environmentally friendly, and I think they are an aggressive choice of colour.'

The Safeway stores are being converted to the new brand at a rate of three a week, but sales were down 7.9% and the outlets made a £39m. loss for the half-year to 25 July. In comparison, sales at Morrisons' original outlets were up 8.9%.

'There were many operational differences in the way the two companies were organised,' said a Morrisons spokesman.

Chairman Sir Ken Morrison said he remained confident and that the troubled integration process was now complete. The Safeway brand should disappear by the end of next year.

'A great amount has been achieved in the last few months, which has illustrated what a good business Morrisons is and has convinced me of what a good deal the purchase of the Safeway business will prove to be,' he said.

It was reported earlier in the week that Morrisons would be selling 120 stores to Somerfield in a £250m. deal. It had picked up the branches in the Safeway takeover, but they were now considered too small.

A spokesman at the Morrisons press office would not comment on whether it was planning to sell the stores, or whether Guernsey's store could be one of them.