EXCLUSIVE: Booker launches tobacco club for symbol group retailers with 2% increased margins

Booker is to launch a tobacco club for its symbol group retailers promising 2% higher margins on fast-selling products.

The scheme will launch on 25 February for Premier, Family Shopper and Londis retailers. Retailers who successfully join the scheme must maintain stock levels of Players Superkings, King Size and Crushball, alongside Gold Leaf 30g and 50g pouches, and Riverstone 30g bags. The products must also be sold at or below the RRP.

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However, the wholesale cost for Londis retailers on the three Players lines are 10p cheaper than the cost for Premier and Family Shopper retailers. For example, Londis retailers save £1.55 on the new price of the Superking products, while Family Shopper and Premier retailers save £1.45.

In return for the promotions, retailers who join the tobacco club must give their EPOS data on products sold through the scheme to suppliers upon request. Booker has also told retailers details of the tobacco club's terms cannot be shared with store owners who are not part of the scheme, rival wholesalers and the trade press due to confidentiality. 

A letter sent to Premier retailers by the symbol group’s brand director Martyn Parkinson states the improved margins are a result of its merger with Tesco. In the letter, Parkinson said: “Since Booker became part of a bigger group, we have been working to deliver the benefits of this relationship to our independent retail estate.”

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Parkinson also claimed the merger has resulted in improved pricing on seasonal Easter products, better pricing on 26 Muller lines with a profit margin of more than 40%, and product launches exclusive to the independent channel, such as Coke Zero Cinnamon.

UPDATE

Londis retailers were also told in the same letter about the tobacco club that the top 20 produce lines within the Farm Fresh range will meet the same specification as products with Tesco and One Stop branding. Wholesale pricing and RRP will be unaffected by these changes.

Elsewhere, the wholesale price and RRP on Discover the Choice 500g chicken breast fillets, chicken thighs and 500g beef mince will be reduced to offer a 5% margin increase. The wholesale price on four-packs of price-marked Foster's, Carling, Stella and Carlsberg beer cans are also being reduced by between £1.14 and £3.64. 

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