Independent retailers split over Tesco-Booker merger

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Booker-supplied independent retailers have reacted with a mixture of optimism and apprehension about the wholesaler’s proposed £3.7bn merger with Tesco.

Announced on Friday 27 January, the deal is expected to complete by early 2018, subject to regulatory and shareholder approval.

Arjan Mehr, a Londis retailer in Bracknell, Berkshire, said the deal was “one of the best things to happen” to the convenience sector.

“Some retailers are annoyed about ‘sleeping with the enemy’, but people need to move away from tribalism. Customers want the best service, range and decent prices – so who better could we be partnering than Tesco?

“I’d rather be on the inside and enjoying some of Tesco’s leverage than on the outside. The market has forced people to do these things. Retailers need to take 25-30% margins to be profitable now, given rising costs.”

Premier retailer Sam Coldbeck, of Wharfedale Premier Stores in Hull, also welcomed the move. “It’s exciting. The independent sector needed to do something dynamic, and it’s great that Tesco chose Charles Wilson. He’s kept every promise he’s made since the Musgrave buyout.

“At the end of the day we’re independent and can jump ship if we want to. But if there’s an opportunity to offer the prices and technology that Tesco can offer, then bring it on!”

But Robert Byford, managing director of Byfords Food Hall, a Londis in Leigh-on-Sea, Essex, expressed reservations. “Are we going to be independent if Tesco takes over? It does worry me what the service will be like. We could still go with someone else, but I’ve been with Londis 20 years and we’ve worked well together.

“I think it will be like Brexit. Half [of symbol retailers] will be suspicious of what’s going on and half won’t worry as long as they get what they want when they want it, and the prices are fair and service good.”

A Budgens retailer, who wished to remain anoymous, said: “I want to know how the deal will affect our independence, especially as there’s a Tesco opposite. I’m concerned Tesco could have access to our data. I also think Booker handled it poorly - our customers come in and ask us what it all means but I don’t have the answers. Some people have even asked to use their Tesco Clubcard.”

Andrew Thornton, owner of Thornton’s Budgens London, wrote on Twitter: “ Shocked by news that Tesco is buying our wholesaler Booker. [We] will fight… to retain our independence. ”

Readers' comments (4)

  • The opinions of current "One Stop" franchisees might indicate how the Tesco/Booker estate could look in the future.

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  • THE BIGGEST PROBLEM WITH THIS WILL BE THE DEMISE OF THE PENNYWISE AND POUND FOOLISH CASH AND CARRY HOPPING MERCHANTS WHO THINK THEY ARE ONE STEP AHEAD OF THE GAME..

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  • Forgive me for underscoring my views in the press again but it’s important that we, within the Booker membership, fully support this merger and think about the future of convenience in a few years’ time and where it’s heading. We no longer have the luxury of “independence” we often hear about. You have no commercial independence at all and so the only independence you may be talking about is making your own decisions within the constraints of a larger group - than there is no problem. No one is suggesting that all independent stores will be converted or be forced on by a Tesco agenda. It doesn’t make any commercial sense at all. I strongly believe that we will continue to enjoy the leverage of a larger group and at the same time be part of a successful symbol group.
    Consolidation has been accelerated in view of the German discounters taking the market share from all and so we need to understand that these kind of mergers is the only way the convenience sector, not just us within Booker group, but the sector as a whole will survive. The other symbol groups are fully aware of this and their balance sheets heading in the wrong direction in the recent past has proved my very point.
    As for the CMA – they only need to look at what the customers are getting out of this deal - More choice, better quality and availability within the larger estate of shopkeepers and most importantly - comparative pricing. I fail to see how anyone can challenge this rational which defines CMA’s own criteria of scrutiny. The supply chain has continued to be blurred in any case over the years and will continue to do so for commercial reasons. Do our customers really care as to who owns what as long as they are getting the above. I don’t think so!!!


    Arjan Mehr Londis Bracknell

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  • It creates a monopoly, what should happen is all Booker related members, premier, Londis one stop etc shop have the option to exit there contracts as the Tesco/one stop brand will create a massive conflict of interest. We have a situation were like the banks, competition is surborninated and the impact will hit the SME. For example Tesco can raise there prices, fail on there SLA's, systemically fail the retailer for there own benefit. There Mite and legal
    strength will make it impossible/difficult for a retailers to fight back; the speed they can destro a business v the speed this country allows justice/ recess will consume you. The banks did it in the interest rate swaps, GRG, and liquidating business scandal and victims are still seeking justice over 10 years after the event. The governance needs to be assured, we are giving them too much power.

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