Half-year pretax profits up 10%; pricing to get sharper; merger not on cards Safeway is to open a raft of "futuristic" hypermarkets in a move which aims to exploit its growing customer base. The chain will convert two superstores into the new 60,000 sq ft format in the next six months, with a view to extending up to 70 shops ­ mainly on edge of town sites. Chief executive Carlos Criado-Perez announced the plan as the chain revealed buoyant interim pretax profit up 10% to £166m, on sales up 8% to £4.7bn. Like-for-like sales in the last six months grew by a healthy 5%. Criado-Perez said Safeway now needed extra space to increase market share which currently stands at 9.7%. The hypermarkets will not contain concessions or sell clothes, white or brown goods, but will include kitchen, DIY and entertainment categories, in what Criado-Perez called a "futuristic view of what the format can do". He also vowed to become even more competitive on price and said the chain's high:low pricing strategy would continue. Its promotional leaflets, which currently go to one in three households, would be developed. "So far they have been used to build traffic and we've attracted one million new customers, but these people are not spending as much as they could. We need to fill our customers' baskets up more." A newly refurbished store in London's St Katherine's Dock will be the first to get a new-look leaflet, focusing more on fresh food. He added: "The effectiveness of our high:low strategy is giving us a competitive advantage and no one has found an effective way to copy or successfully react to it." Criado-Perez insisted that the chain had a bright future and that a merger was not on the cards. "We're not a target ­ we want an independent future." Rowan Morgan, retail analyst at Teather & Greenwood, said Safeway's success was based on Criado-Perez's retail knowhow. "The high:low strategy is definitely working for them and we'll probably be raising our forecast at the next trading statement." {{NEWS }}