Tesco/Booker Deal A Total Game Changer
Tesco/ Booker take over (merger) has profound implications for the Grocery trade and for small independent stores. If approved by the Monopolies & Mergers Commission it brings down the Chinese walls between retail and wholesale in the Grocery industry and opens suppliers up to one pricing model. Tesco will argue that the deal will bring sharper pricing to their (Booker's) wholesale customers. Of course it remains to be seen if the buying benefits are passed on. If they are then retailers will obviously benefit. But take the biggest wholesaler out of the sector and what does that mean for suppliers and the remaining wholesalers? Wholesale has long been more profitable for suppliers than selling to the multiples. Will they be prepared to invest in wholesale at the same level and in the same way as they do now? And what about the Tesco branding? Will this be made available to the small independent stores and if it is will they want to stock it? Lot's of issues to consider. Key consideration: is this good or bad news for the independent retail sector?
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