Safeway IT team prepared for takeover

Trade and Industry secretary Patricia Hewitt finally gave the green light to Morrisons’ takeover of Safeway today (26 September),...

Trade and Industry secretary Patricia Hewitt finally gave the green light to Morrisons’ takeover of Safeway today (26 September), ending months of uncertainty for the IT department at the supermarket chain.

Safeway has continued to invest in IT to prepare for the takeover, which was announced in January, said Scott Langdocs, vice-president of research for retail at analyst firm AMR Research.

“Safeway has continued to focus on improving the supply chain and rolling out cutting-edge technology, such as price optimisation and electronic shelf-edged pricing,” he said.

“It is working towards an environment where integration with whoever takes over will be as painless as possible.”

Under the proposed terms of the Morrisons deal, Safeway's head office operation in Hayes would close leading to a reduction of 1,200 non-store personnel jobs.

Many Safeway's IT staff could be affected, given that Morrisons has identified £75m worth of savings from combining the head office and central functions of the two groups.

Despite these potential job losses, morale at Safeway’s IT department has remained good, Langdocs said.

“From speaking to Ric Francis [chief information officer at Safeway] the morale in the IT department for the most part is good,” he said. “Obviously, morale will be closely linked to who takes over as the IT guys will have their own ideas about where their skills will fit in.”

Conversely, the takeover may be good news for the IT department because of the need for systems integration, said John Davison, principle retail analyst at GartnerG2.

“There is a lack of sophisticated infrastructure at Morrisons, so there will be a need for IT staff,” he said. “Other functions will be feeling the heat first, perhaps in softer areas such as human resources.”

Although bids from Tesco, Sainsbury’s and Asda were turned down on competition grounds, the Morrisons takeover is not guaranteed, as venture capitalists may want to bid, Davison said.

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