The end is nigh. The once-proud retail institution that is Safeway is on the verge of being snapped up in a deal likely to be worth about £3bn, and the only remaining mystery is the identity of the buyer.
It has been more than eight months since Morrisons' initial takeover approach stunned the UK retail sector, sparking a flurry of bids involving the heavyweights of the grocery retail market.
But while Trade and Industry Secretary Patricia Hewitt mulls over the recommendations contained in the Competition Commission's report, consumer confidence in the retailer is being hit.
Although the company's share price has risen significantly since Morrisons' approach was announced on January 9, chairman David Webster admitted at last month's trading update that the chain's performance was being adversely affected by the uncertainty surrounding its future.
Last week, Marketing revealed that Safeway was planning a three-month promotion to shore up consumer confidence and increase the size of shoppers' transactions at its stores.
The promotion will offer discounts on non-food items linked to the amount a customer spends in Safeway (August 21).
With Safeway's next set of quarterly figures due out in late-October, and interims to be announced a month later, boosting like-for-like figures is clearly a priority. But analysts are sceptical about the promotion's chances of anything more than superficial success.
"A short-term promotion might put a gloss on like-for-likes but I doubt that Ken Morrison (chairman of Morrisons) is going to be fooled by it," says one retail analyst.
According to TNS till roll data, market share fell by 0.7% in the 12 weeks to June 22 compared with the same period a year earlier.
While the company points out that the World Cup and Golden Jubilee of 2002 make this a slightly misleading comparison, the relative performance of the industry's everyday low pricing specialists, Asda (up 0.8%) and Tesco (up 1%), tell their own story.
"If you look at Safeway's performance in the context of the bid saga, then with the problems of uncertain supplier relationships and the impact on staff morale, it seems the company has made the best of a difficult job," says the analyst.
Since January, Safeway has eschewed major brand-building activity in favour of a continuing focus on the 'high-low' promotions that have been the staple of the company's marketing for several years.
No sooner had the Morrisons takeover been announced than Safeway pulled out of final negotiations with a host of music stars to play at a summer gig in Hyde Park.
Events held the previous two years were deemed a huge success at raising the profile of a company which has shunned TV ads for several years. Karen Bray, the chain's marketing director, clearly felt there was no more for her to do when she quit in June.
Industry-watchers believe the business has suffered as a result of the decision not to proceed with its brand-building strategy.
"The brand has suffered, but it had been expected that the Morrisons takeover would be through by Easter ," says an industry insider close to Safeway. "The irony is that brand ads may have helped shore up consumer spending when the business genuinely needed it."
The other area hit has been investment in the reformatting of stores.
But some analysts believe the store upgrade programme was not delivering in any case. "There has been an acknowledgment for a long time that Safeway couldn't compete on price with Asda and Tesco. 'High-low' was a guerrilla tactic with limited success, but store upgrades were less effective. Safeway was not choosy enough about store locations," says the analyst.
Safeway remains bullish about its strategy. "Our approach is largely unchanged," says communications director Kevin Hawkins. "We have been offering the same number of deals and the same level of NPD. The average customer has not noticed any difference."
He insists the company stands by its decision three years ago to scrap its ABC Card loyalty scheme. "Deals are what people value Safeway for," says Hawkins. "If we had not invested in them as we did, we may have been in trouble earlier."
As the bidders await Hewitt's verdict, expected well before the end of the year, odds are shortening on Morrisons being cleared to proceed with its offer. Last-ditch efforts by Asda to guarantee it could ease competition concerns are likely to result in approval subject to a wealth of restrictions.
Tesco and Sainsbury's look unlikely to be successful. Retail entrepreneur Philip Green, already cleared to proceed with a bid, has yet to show his hand.
12 wks to Jun 23 2002 12 wks to Jun 22 2003
% of total grocers % of total grocers
Tesco 25.9 26.9
Sainsbury's 17.7 16.8
Asda 15.5 16.3
Safeway 10.2 9.5
Morrisons 5.9 6.1
Somerfield Group 5.7 5.5
Waitrose 3.1 3.1
Iceland 2.4 2.3
Source: TNS Till Roll data