Morrisons' chief rival for the right to purchase of Safeway has temporarily withdrawn from the race. Trackdean Investments, the company owned by retail entrepreneur Philip Green, announced on the 30th October that they will not make an offer for the supermarket group. The most likely reason behind the withdrawl is the UK Competition Commission's ruling to limit the number of Safeway stores which could be sold to the other major supermarket operators to only 53. City analysts forecast that this would reduce the financial flexibility of a bidder, such as Green, as he would not be able to sell off underperforming outlets.
However, Trackdean also said that it reserved the right to make an offer for Safeway in the event that a third party i.e. someone other than Morrisons came forward with a rival bid. Since this cannot be any of the top three players following the Competition Commissions ruling, and it is unlikely that any other domestic retailers would want to acquire the whole of the Safeway group (though several have been linked to the 53 stores already up for sale), the way now seems clear for Morrisons offer to proceed as planned barring an extremely unlikely offer from a foreign retail group.
The only remaining uncertainty is what price the Yorkshire-based retailer will offer for Safeway, with most observers suggesting it is unlikely to be as high as its initial £2.5 billion offer made in January last year.
Sales of organic food and drink in the UK are expected to soar by almost 75% over the next few years, according to a report published today. Market analyst Datamonitor believes that the market will grow from its £940m value last year to £1.6bn in 2007. The report, entitled Natural and Fresh Food and Drinks, suggests that organic meat will show the biggest gains, with the market predicted to more than double from £152 million to £351 million by 2007. Organic ready meals are also forecast to grow, with a predicted annual compound growth rate of almost 17 per cent over the same period.
According to the report, the number of regular organic shoppers will increase from 2.4 million in 2002 to 11.4 million in 2007. However, it warned that growth would hold back while organic products were seen as more expensive. Daniel Bone, an analyst at Datamonitor and the author of the report, said: "Consumers need to be more fully educated about organic produce and its benefits, both to health and to the environment."
The UK has the second-biggest organic sector in Europe but is still a long way behind Germany, whose market was worth £2.1bn last year.
Tesco is to extend its interest in large-scale urban regeneration projects in order to further develop its store portfolio, particularly in London and the South East, two strategically important areas where new sites have proven hard to find.
Sites chosen are likely to include Dartford in Kent, where the local authority has already agreed in principle to support the project through compulsory purchase of the land. Tesco, working with St James Investments, plans to use the Dartford site for a Tesco Extra hypermarket of up to 100,000 sq ft, combined with smaller shop units and a new public square. There will also be a medical centre and 459 apartments.
The report explores how the terms of trade for primary producers have declined and the gap between producer prices and retail prices has grown, accompanied by problems of access to markets for many of the world's farmers.
It examines the impact of the growing concentration of those companies who trade, process, manufacture and sell agricultural goods, and the impact on key commodity chains.
The report points to policies that can ensure more equitable trading relationships and provides options for re-balancing the markets.
