Indies expect quick wins from Booker-Tesco merger

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Booker-affiliated retailers are expecting some quick wins from the wholesaler’s merger with Tesco, which came into effect this week.

Tesco and Booker shareholders voted in favour of the deal last Thursday, more than a year after the merger was first proposed. Independent retailers acknowledge that the long-term ramifications of the deal could take months, but are holding out for some short-term gains.

C-Store understands that retailers have been promised price reductions on a number of lines within two or three months.

Arjan Mehr, a Londis retailer in Bracknell, Berkshire, said: “We’re hopeful of getting some quick wins in terms of service level and pricing, especially on two to three dozen key lines including in fruit & veg and bread and milk. If that doesn’t happen people will get cynical.

“Then we can look at how the brand can progress. We expect long-term improvements in retail and non-retail, such as in banking.”

Paul Gardner, a Budgens retailer in Islington, London, agreed that retailers would become cynical without reaping some early rewards. “There’s got to be short-term wins, but we’ve got to look at the bigger picture, too - I think it’ll take a couple of years to feel the full benefits.

“But within the next three months I’m expecting a package of quick wins relating to banking and payment charges. I accept American Express, which costs us quite a lot.”

Mayur Patel, owner of Premier Saxon Fields Store in Andover, Hampshire, said: “I have a good feeling that things will get better. It’ll take a while for changes to come through the system. I would hope that within a year we’ll see some changes, but we’ve already waited a year for the shareholders’ vote so I’m not impatient.

“However, I expect to get better banking charges within the year. And perhaps we’ll be able to operate Tesco mobile phone outlets? I’ll put the idea forward.”

Meanwhile, Booker chief executive Charles Wilson becomes Tesco UK retail and wholesale ceo, while former chairman Stewart Gilliland has been appointed to the Tesco board as a non-executive director.

Better terms

“I’m hoping for consolidation of buying terms. I want my offer to improve, but I don’t expect big changes for six to 18 months. I’m less optimistic on banking, but I’d love to have Tesco Clubcard.”

Steve Bassett, six Londis stores, Dorset & Hampshire

“I hope to get things like Easter Eggs at reasonable prices - products that supermarkets use as loss leaders. I’d also expect to have free banking charges in the short term.”

Adam Moody, Londis Embleton, Northumberland

Readers' comments (22)

  • They will be shafted eventually.This will NOT end well

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  • What's banking got to do with this merger. I want cheaper prices and that's what it is all about percentage because booker are good at taking this off us so we might get some back but won't hold my breath

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  • By the logic of these retailers One Stop should already be much cheaper than Booker. It isn't.

    As for the Easter egg thing- get real!

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  • So Adam Moodythinks Tesco are going to pay his bank charges? What? Why? Adam, did anyone ever explain to you that Santa Claus and the tooth fairy aren't real?

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  • I've been saying for months that expectations of both the Tesco/Booker takeover and the Co-op/Costcutter supply deal are unrealistic but the expectations of the retailers quoted in this article are absolutely ridiculous.

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  • As a Spar retailer I am switching to Londis or Budgens immediately. Tesco will pay my business rates, bank charges and the window cleaner. I will have access to the entire Tesco range including the £10 meal deal, my prices will be lower and my margins will double. I will open a non-food department in the flat upstairs and maybe that old shed in the back yard would make a nice F&F clothing section. What's not to like?

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  • This is becoming amusing to watch. Retailers expectations are far from real and I’m not sure where all these wacky bank charges etc are coming from.

    The only people that will make a fortune from this is the execs. Check out how much the Booker Directors have made from this deal (and previously). it will be your average Shop value x25 (at least).. seriously wake up and smell the coffee!! The execs are going to make loads more cash with the synergies from the merger - then they will ride into the sunset leaving retailers to wait for free banking haha

    I’m not suggesting there will not be benefits for retailers but my guess is the execs will take the bulk of the benefits and turn it into dividends and share price value. If you want to see up side from the merger - buy some shares in Tesco!

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  • Sarcasms & ridiculing expectations may be amusing to some people but there is nothing wrong with our expectations as booker members. What you ask for and what you get are two different things! However the booker retailers were in the best positions in terms of availability and supply chain and quality of produce and chill even before the merger, unlike other symbols who were either floundering or desperately looking for consolidation to saves themselves. I don’t take any joy in saying this.
    What retailers or so called independent retailers needs to understand is that the number of suppliers are shrinking and there is NO alternative to consolidation. Regardless of its potential short Cummings, as the cynics are now peddling with a big fat zero to give us as alternatives. So let’s get real. The days of wheeling and dealing are over and a partnership in an ever decreasing numbers of supply chain is our only saviour.

    As non-retail demands like banking and the rest is also realistic. It’s not the wholesale price that keeps shops open, other costs of running businesses are equally important. The more help retailers get in leveraging those the better for the profitability of our business.


    Arjan Mehr Londis Bracknell

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  • If the performance of our nearest Tesco stores during the snowfall is anything to go by I do not think Londis retailers have reason to be optimistic.

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  • if I was Tesco ceo , I would want to increase the wholesale side to capture larger market as supermarket arena is saturated . so it can be two prong strategy , 1) offer better pricing / promotions to retailers 2) offer better banking / card charge services .

    Tesco will already have this as their normal operations so it will be matter of rolling it out to retailers .

    next most profitable option for Tesco to look at would be own banking arm and get retailer's accounts .

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