Tesco accused of using 'spoiling tactics'

Tesco's decision to enter the scrap for Safeway has been branded a 'spoiling tactic' by analysts.

Meanwhile, Morrisons boss, Sir Ken Morrison, said Tesco taking Safeway 'could create an anti-competitive and unhealthy marketplace.'

Tesco revealed on Wednesday that it is considering a possible offer, giving it a seat at the table.

Finance director Andrew Higginson denied the charge and said he believes Tesco could retain 75 per cent of Safeway's 480 stores.

But Numis analyst Mark Hughes said he thinks the number Tesco could hold would be between 150 and 190.

He said: 'Tesco are muddying the waters a little bit. Their market share is too dominant for them to take it (all) so it can be seen as spoiling tactics.'

Higginson said: 'In scale terms, the arguments against us apply to Wal-Mart and Sainsbury's. Wal-Mart is five times the size of us and are always talking about leveraging global buying terms, while Sainsbury's was the market leader in the 1990s.'

Teather & Greenwood analyst Dave Stoddart said: 'It's very unlikely that they (Tesco) are going to be given the job of re-allocating Safeway to its competitors.'

A source close to Safeway believed that Tesco's pounce is tactical, so that the big grocer can have some say in picking up stores if a rival bid succeeds.