The dip compared to an increase of 0.1% in the third quarter while half year like-for-like sales showed zero growth.
Total sales growth was down 0.3% for the fourth quarter, up 0.5% for the second half and up 1.3% for the full year.
Safeway said actions to limit the effect of recent events on its short term profitability had been taken, as well as measures “to retain and motivate our people, with particular focus on key staff in head office”.
However, the supermarket said despite this and “continuing support from suppliers”, the group's results for the second half and for the year have been affected. It expects full-year pre-tax to be £335m “within the range of market forecasts".
Safeway added that its reformatting programme had been scaled down with capital expenditure lower than expected at £340m. Five new stores will be opened this year and “a modest forward development pipeline” will remain with a budget of some £230m for the current year.
Chief executive Carlos Criado-Perez noted: “Our trading performance is stable and I am confident that we are ready to meet the challenges which lie ahead.”
Chairman David Webster said that the bidding process for Safeway had entered the second stage and that the group was committed to achieve an outcome which is in the best interests of shareholders and the business as a whole.
The group also revealed a deficit of £217m for its pension fund compared to a surplus of £201m in 2001.