Yahoo Finance Booker woos shopkeepers over Tesco merger
Booker bosses will launch a charm offensive this week in an attempt to convince Britain’s shopkeepers of the merits of its shock £3.7bn Tesco merger, amid rising concerns that the deal will strangle competition in the convenience store market.
Booker chief executive Charles Wilson and managing director Steve Fox will begin by addressing thousands of Premier convenience franchise owners at Newbury Racecourse next Wednesday as part of a tour of the UK.
Booker supplies 5,463 Premier, Happy Shopper, Londis and Budgens convenience stores. The shopkeepers own the properties and manage their stores on a franchise basis.
It is thought that while some shopkeepers are encouraged that the Tesco tie-up will mean greater purchasing power and lower prices, there are growing fears among rivals about Tesco’s sprawling control of the nation’s grocery supply chain.
Senior retail sources have claimed that it is “disingenuous” for Booker and Tesco to dismiss competition concerns because Booker only owns six of the 6,000 shops it supplies.
“It will run through Tesco’s buying and sourcing teams, meaning that Tesco will not only control the supply and pricing that feeds into its 3,569 supermarkets, Tesco Metros and One Stop convenience shops, but the entire Booker convenience network,” one senior retailer said.
“Their argument about ownership and supply is a red herring and the nature of being an independent sits at odds with Tesco being in control of your supply,” he added.
The Association of Convenience Stores will be lobbying the UK’s Competition and Markets Authority to ensure the watchdog understands the implications for the entire convenience sector. The deal will place huge pressure on Costcutter, Nisa and Spar as they compete with Tesco-Booker.
