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Safeway still proving headache for Morrisons.

SUPERMARKET chain Morrisons is continuing to suffer difficulties in seeing through last year's purchase of Safeway.

The group, which has already issued two profits warnings in the wake of the tie-up, said the costs associated with integrating the two businesses were taking longer to eliminate than hoped.

In a further blow to profits, Morrisons said additional costs would cause margins to run significantly short of last year's levels.

The Bradford-based company also said sales had made 'good progress' since its annual results in March, when the company said bottom-line profits fell to pounds 297.1m, frompounds 319.9m a year earlier. Morrisons, which paid pounds 3bn for Safeway last year, warned that it did not expect a significant reduction in costs until the completion of the programme to convert the acquired Safeway stores
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Title Annotation:Business
Publication:Daily Post (Liverpool, England)
Geographic Code:1USA
Date:May 14, 2005
Words:133
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