Tesco’s interest in Booker clarifies

The extension of Tesco’s Click and Collect network is a key part of the supermarket’s plans for its proposed acquisition of the wholesale chain Booker according to its CEO Dave Lewis who spoke to City analysts today.

As well as running the wholesale network, Booker owns the Premier, Londis and Budgens chains of convenience store franchises. These convenience stores are a key focus of Tesco’s approach, and would add 4,000 stores to Tesco’s 3500 stores nationwide.

Should the Tesco / Booker merger be approved by the authorities, and no major divestment is required Tesco could end up with a network of more than 8000 stores that would be used as click and collect points. There is no guarantee that the authorities would let this through unscathed…

Londis is a franchise where stores are owned independently by small retailers. Budgens and Premier are wholly owned by Booker.

In his conference call with City analysts, Lewis argued that the expanded click and collect network would be beneficial to both Tesco and the independent store owners.

“Consider the idea that through this merger and through a network of close to 8000 click-and-collect points we would drive traffic to those independent stores as a way of giving more service from the combined operation,” Lewis was quoted as saying.

One of Tesco’s key rivals in the supermarket arena, Sainsbury’s, expanded its click and collect capabilities significant last year with its acquisition of Argos. Following Tesco’s move on Booker last month, reports have been circulating that Sainsbury’s might be eyeing a merger with Morrisons.
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