David Rees: Editor's comment

All posts from: June 2015

The big deal

Posted by: David Rees Tue, 2 Jun 2015

The dust has settled a bit on Booker’s proposed acquisition of Musgrave GB which, assuming it is approved, will have a huge and lasting impact on convenience retailing in the UK.

The immediate benefit will be felt by symbol group retailers, where Premier operators should get better fresh and chilled, Londis retailers should get better prices, and Budgens retailers should get more entrepreneurial flexibility.

So, on the face of it, it’s a massive win-win-win for retailers, but it might take a while before the desired outcomes can be fully realised. Booker’s recent success has been based on simplicity and lean management, so let’s not underestimate the challenges that the organisation faces in taking over a complex and people-heavy pair of symbol groups.

There are a couple of other nagging issues that need solving as well. The Budgens company-owned stores will have to be disposed of somehow, and with 4,900 symbol retailers being served by Booker there will be some issues of proximity, although industry insiders suggest there might only be as few as 70 locations where this could be an issue.

In any case, the positives heavily outweigh the negatives. A profitable supply partner has to be a more sustainable basis for businesses to grow than one surrounded in anxiety and doubt. Indeed, convenience is in boom, but at present many of its symbol group practitioners are falling short of targets, or even basic profitability. Only consolidation can solve this, and the process has begun.

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