UK wholesaler Booker Group has posted a total sales increase of 0.5% for the fourth quarter of the year, with like-for-like sales up 0.7%, in its first trading update since Tesco announced it was to take over the business.
Like-for-like non-tobacco sales were up 4.7% at the group, however like-for-like tobacco sales were down 7.9%, due to ‘the tobacco display ban and new plain packaging restrictions coming into force’, the group said.
Full Year Performance
For the 52 weeks to 24 March 2017, total sales were £5.3 billion, an increase of 6.7% compared to last year. Like-for-like non-tobacco sales increased by 2.8%, and like-for-like tobacco sales reduced by 4.6%.
The group said that over the full year, like-for-like sales to retailers were down 0.6%, primarily due to the tobacco display ban and plain packaging restrictions. Customer satisfaction scores were ‘good’, it noted.
A Good Year
"Overall, 2016/17 was a good year,” commented Booker chief executive Charles Wilson. “Customer satisfaction was good and sales were the best we have ever achieved.”
On 27 January, Tesco announced it was to take over the Booker business in a deal worth £3.7 billion, and Wilson said that the group was “excited about the benefits the enlarged Group will bring to consumers, our customers, suppliers, colleagues and shareholders. The merger is going through the competition process.
“Meanwhile it is business as usual as we continue to improve choice, prices and service for our retail, catering and small business customers."
Earlier this week, Tesco chief executive Dave Lewis said that the retailer remains “committed” to the Booker deal, following shareholder concerns over the price paid for the wholesaler.
Greater Efficiencies
Commenting on the impending merger, David Alexander, Senior Retail Analyst at GlobalData, said. "The greater efficiencies of the merged businesses should allow for vitally important cost savings and enable both to be more price competitive, without significant margin dilution, at a time when competitors and consumers will be feeling the pinch.
"It would also give Tesco greater exposure to the fast-growing food service market, with Booker’s restaurant clients representing a veritable who’s who of high street chain favourites. Following the very high profile spat with Unilever over prices and with the horse meat scandal still lingering in the memory, Tesco will also be grateful for the heightened control and visibility over its supply chain."
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
