Tesco still ‘working hard’ to deliver promised benefits, five years on from Booker merger

Tesco is still “working hard” to deliver Booker retailers the economies of scale promised following its takeover of the wholesaler five years ago.

March 2023 will mark the five-year anniversary since the supermarket completed its merger with Booker. Prior to its completion, then Booker chief executive Charles Wilson promised that Tesco’s resources would give independent retailers access to improved pricing, quality and availability, alongside banking, mobile phone contracts and mobile payment services.

One major development of the merger was the introduction of the Jack’s own-label range into symbol stores last year. However, store owners reported that they were still yet to see promised banking and mobile payment services.

Commenting on why these services are yet to be introduced during a call about the wholesaler’s Q3 trading results, Tesco chief executive Ken Murphy said: “Booker has had its best performance ever this year and that’s testament to the great value and availability that it provides its retail customers. That is in no small part due to being able to leverage Tesco scale.

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“We’ve seen great response from independent retailers. Most independent retailers I talk to say that value is first in their mind. Second is what we can do around banking services and more. These are areas we are working on, but what they’re really interested in is great availability and value.”

Asked whether further benefits can be delivered to retailers, Murphy added: “We’re always looking to recruit and try to evolve the proposition to make ourselves more efficient. We will continue to evolve the Booker proposition.”

Murphy also revealed that the Jack’s range is due to be extended further this year, following a successful rollout of more than 500 lines in 2022.

Last year also saw Booker rollout ‘delivered dark hubs’, distribution centres in Stoke and Exeter designed to specifically service and improve delivery for Premier stores. Despite the investment, some retailers from the symbol group who were being served by the site reported ongoing delivery issues.

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Murphy said the wholesaler was working hard to improve the availability levels from the sites. He said: “Both have transitioned well and we’re always working on availability. The industry as a whole has challenges, but Booker has the best availability on the market. We’re never happy and we’re always looking to improve availability.

“It’s a model we are pleased with and constantly evolving our network strategy will be a part of our considerations.”

The results for the 19 weeks ending 7 January 2023 revealed that Booker Group like-for-like sales during the period increased by 15.8% annually. The wholesaler’s retail like-for-like sales rose by 11.9%, which includes a 6.8% decline in tobacco.  

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