Supermarket group Morrisons today revealed that Safeway's performance had continued to decline, with like-for-like sales 7.9% lower in the first half.
The Bradford-based chain, which acquired the Safeway business earlier this year, unveiled pre-tax profits of £121.6 million during the period, down from £131.6 million last time and in line with analysts' expectations.
It also confirmed a "great deal of interest" had been expressed in its Safeway Compact stores and that offers were being considered.
Chairman Sir Ken Morrison refused to comment on reports that the group was selling up to 120 smaller stores to rival Somerfield, but said he had made no secret of "testing the market".
"We are basically sounding the market at this stage, that's all that's happened," he said.
Morrisons had already warned that today's profits would be affected by "short-term" problems integrating the Safeway estate.
Despite the continued decline at Safeway, Sir Ken said the integration was progressing well, and insisted the deal would prove to be a good one.
He added: "A great amount has been achieved in the last few months which have 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."
The core Morrisons chain delivered a strong performance, with like-for-like sales 8.9% higher in the six months, while Safeway stores already converted to the Morrisons format were well ahead of expectations.
In the first 10 weeks of the second half, same-store sales at unconverted Safeway sites were 10.1% lower, while converted stores saw a 12.5% increase.
Sir Ken said the group was due to accelerate the conversion from three stores a week to a minimum of four a week.
Although he admitted the last six months had been tough, he added: "This is an ambitious programme and one we will deliver."
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