SAFEWAY SET TO CLOSE 17 OF ITS SMALL STORES

JAMES FALLON

LONDON (FNS) -- Safeway, the United Kingdom's third-largest food retailer, plans to close 17 of its smallest stores, which could eliminate more than 1,000 jobs.

The stores are throughout the United Kingdom, and all were opened in the 1960s and 1970s, a spokeswoman said. They average 14,000 square feet, compared with Safeway's newest stores, which average 25,000 to 30,000 square feet.

Safeway declined to reveal the cost of the closures.

"While we are now closing 17 old stores, we continue to have an active new-store development program, opening 21 during the 1994-1995 financial year and 17 during the 1995-1996 financial year," said Colin Smith, Safeway's chief executive officer.

Safeway operates 383 stores throughout the United Kingdom, with a total sales area of about 8 million square feet. The company said it could not pinpoint the exact number of jobs that will be eliminated by the closures, since it hopes to redeploy many of the stores' employees. Safeway has been struggling over the last year to carve out a strong niche in the increasingly competitive U.K. food retail market. Meanwhile, reports continue that Safeway's parent, Argyll Group, could be an acquisition target for a continental European food retailer looking to break into the United Kingdom.