Tesco has shed further light on the “mixture of opportunities” that its proposed £3.7bn acquisition of Booker will present, including the possibility of enhanced financial services and click and collect for independent retailers.
Budgens and Londis retailers have welcomed Tesco chief executive Dave Lewis’ comments, but are calling for more information on how the takeover would impact their businesses.
Lewis told C-Store there were new opportunities in terms of what Tesco and Booker could do together in product development, click-and-collect for Booker’s customers and ways of developing the businesses together. This included support “in terms of some of the financial services that go into retailers as well. It’s quite a mixture of opportunities,” he said.
Jag Brar, who owns a Londis store in Cricklade, Wiltshire, said: “I’m encouraged by his comments, because it shows he’s thinking about us independents, and I’m excited to know what ideas he has.
“With click and collect, I question whether it would work in a store our size. But we have to change with the times and give it a go, especially with the likes of Deliveroo getting more popular.
“At first I was cynical – now I think ‘let’s give it a go’. The buying power will be huge and we’ll be able to compete better. But there are still unanswered questions, such as how we’ll operate alongside Tesco Express and One Stop.”
Vic Grewal, who owns a 1,000sq ft Budgens store in Thames Ditton, Surrey, said Lewis’ comments were “a statement that they want to work with independents”.
Click and collect depends on the size of the store, he added. “This store in Thames Ditton is too small. They need to be more specific about click and collect and financial services. It’s too broad.
“But I’m sure Tesco want independents to flourish. If independents flourish they flourish as well. I think the deal will be good for us,” Vic said.
Lewis emphasised the importance of convenience to Tesco even though net openings of One Stop and Express were each in single figures last year.
He said in Tesco’s largest stores convenience shopping was “one of the fastest growing shopping missions”.
Tesco had reconfigured “quite a number” of its shops to place food to go at front of store and making it more accessible.
“You see innovation in some of the hot food, the product line-up, so everything we’ve been doing over the past 12-18 months on sushi and the health range and the evolution of meal deals – there’s quite a lot going on there and there are other innovation business development tests we are running in the estate for how we can enhance that.”
These included how such innovations could be enhanced in some of Tesco’s Express stores, he said.
BUSINESS AS USUAL FOR TESCO
The Booker deal, which is still awaiting a formal response from the Competition and Markets Authority (CMA), has not affected the opening of new convenience stores, Lewis said.
“We continue with the plans for Express and One Stop in the way we had them before…the Booker process has not changed the plans we had.
“We continue to engage with the CMA on the merger and expect to be able to seek approval from our shareholders in late 2017/early 2018,” he added.
Tesco announced a 1.3% increase in like-for-like food sales in the year to 25 February.