Independent retailers 'unsure' of Tesco-Booker deal

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Only 11% of independent retailers are in favour of the Tesco and Booker merger deal, while the vast majority are uncertain about its potential impact on the trade, according to new research from Bestway Wholesale.

Bestway surveyed 2,548 independent retailers face to face over a four-week period prior to Easter. Over 62% of the retailers interviewed were Booker symbol customers operating as either Premier, Londis, Family Shopper or Budgens stores.

A total of 17% of respondents believed the merger to be ‘not good news’ for the independent trade, while 71.6% said they were ‘not sure’, preferring to wait and see. When asked ‘what concerns you about the merger’, 17.2% were not happy about their purchases contributing to Tesco’s profits while 17.9% were concerned wholesale pricing would not reduce. 

However, the survey also found that 48.3% thought better wholesale pricing would materialise as a result of the deal, while 31.9% expected a better choice of products and 31.3% believed better supply and availability would result from the deal. 

Martin Race, managing director of Bestway Wholesale, said: “The most significant finding for us was the extent of retailer uncertainty with over 70% saying they were ‘unsure’ if the merger was good for the independent trade, and almost 20% saying they felt it was ‘bad’ for the sector. Booker has claimed that retailers will receive better prices and therefore retailers’ greater margins while Tesco has said that no upward pressure will be placed on suppliers.

“These mixed signals are only adding to the uncertainty of what the proposed agreement will mean for customers. For retailers there appears to be too many uncertainties, what-ifs and contradictions coming out of Tesco and Booker. The best way for retailers to grow their businesses is to have clarity rather than uncertainty over what the future holds, only then can they plan for the future.”

Readers' comments (4)

  • Palmer and Harvey being bought by Bibby could throw a spanner in the works especially if Bibby go back for NISA.

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  • I could be wrong but I thought Bibby has been offered P&H already before the restructure but turned the opportunity down?

    NISA will depend on mutuality vs potential new benefits, which if it comes down to the latter with a deal to be made could also bring Bestway into the mix.

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  • Surveys should always be taken with a pinch of salt, especially those conducted face-to-face.
    However, it is obvious that most concerned retailers will be uncertain about their future if this arrangement goes ahead.
    No amount of "clarity" beforehand would make any difference; once the deed is done, the goalposts will be moved, as they always are when ownership changes.

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  • Bibby is a major logistics company. It owns Costcuttter but chooses to use P&H for distribution to stores, rather than a Bibby company. Tesco has owned One Stop for a number of years but has not integrated it into Tesco logistics. These precedents would suggest to the interested observer that integration across sectors isn't easy and that Tesco-Booker integration may never be delivered even if they belong to one holding company.

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