Safeway chief executive Carlos Criado-Perez yesterday [Wednesday] conceded that his group is vulnerable to takeover.

Speaking as he announced full-year profits up 11% to £355m (US$517.8m) Criado-Perez acknowledged the group was vulnerable but added: “I would hate that to happen. I want Safeway to be an independent company.”

Although the profit figure looks robust, a trading update paints a rather bleaker picture. Sales growth has slowed, and the stock market responded accordingly, losing 9.5p to close at 308p.

Criado-Perez is credited with starting a strong turnaround campaign since his appointment, but analysts are concerned that it is running out steam. He responded to this by pointing to the costs of revamping Safeway’s 478 stores, of which about a third have been overhauled. “I could choose to do a cosmetic exercise and stop the trauma in some places to get a better figure. But we need to drive this forward,” he said.

Over the last couple of years, Safeway, the UK’s fourth-largest supermarket chain, has repeatedly been the subject of takeover speculation. Dutch giant Ahold, as well as French groups Carrefour and Casino, have been cited as potential buyers.