What is Booker?
Booker is a grocery wholesaler supplying 125,000 independent convenience stores as well as 468,000 restaurants, pubs and leisure facilities such as cinemas.The group employs 13,000 people, had sales of £5bn and made £155m in operating profit in the year to March 2016.
It is the UK’s largest cash-and-carry operator via its 172-store Booker chain and Makro, which has 30 outlets. Booker also controls the Premier, Londis, Family Shopper and Budgens symbol groups which make up about half of the retail clients it supplies.
Premier is the largest branded group with 3,358 outlets, while Londis has 1,903, Budgens has 150 and Family Shopper 52. Booker doesn’t own these stores – they are all independently run and owned – but it sells them a large proportion of their stock and assists with marketing, IT and a whole range of other services making for a close relationship.
The group’s Booker Direct service also delivers grocery supplies to most of the major cinema chains, including Odeon and Cineworld, the national prison service and provides the limited array of non-own label food sold in Marks & Spencer.
Booker also supplies 450,000 caterers including major chains such as Wagamama, Carluccios and Byron burgers and 700,000 small businesses.
Booker opened its first store in Mumbai in 2009 and now has six wholesale outlets in India, where it also runs the Happy Shopper brand.
Why does Tesco want to buy Booker?
There are four main reasons:• Shoppers are moving away from big supermarkets and locating suitable new sites for its Tesco Express and One Stop chains has become more difficult. Tesco wants to extend its reach by supplying thousands of independent convenience stores.
• Buying Booker would also take Tesco into catering supplies – a new fast-growing market as people increasingly opt to dine out or eat takeaways rather than cook at home.
• If the deal goes through Tesco will have access to more than 5,000 corner shops where customers can pick up goods ordered online or access Tesco services such as banking and its mobile phone network.
• The merger will give it more clout with suppliers and cut costs by merging distribution and other operations. Analysts estimate Booker will add about £2bn-£3bn to Tesco’s current £45bn of buying power. Meanwhile, Tesco estimates it will save £175m a year in costs, £96m of which will come from improved procurement.
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