NEWS ShopTalk T
esco aims to grab a further £2.5bn of sales in the UK as it teams up with wholesaler Booker to sell to independent corner shops, restaurants and cafes. The UK’s biggest supermarket unveiled the plan as it announced a 28% rise in operating profits, bolstered by better than expected sales growth in the last three months of its financial year.
independent convenience stores. Mr Wilson said there were about 100 Tesco locations which could be suitable for Chef Central. Tesco is also rumoured to be planning to test a new discount chain or family wholesaler similar to Costco, but Mr Lewis declined to comment on those rumours.
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The UK’s biggest retailer said it made a pretax profit before exceptional items of £1.64bn in the year to 24 February as total group sales rose 2.8% to £57.5bn. Sales at established UK and Irish stores rose 2.4% in the final quarter, just ahead of the 2.2% expected by analysts. The update is the first since the completion of Tesco’s £3.7bn takeover of the grocery wholesaler Booker. Booker’s former chief executive Charles Wilson has taken over as head of Tesco’s UK business. Tesco chief executive Dave Lewis said the deal would bring about cost savings and a potential £2.5bn in extra sales from joint projects. Tesco has already begun testing a mini version of Booker, badged Chef Central, at one of its supermarkets and is considering using its home delivery vans to serve Booker’s clients, which include restaurants and
6 May 2018
new era for Costcutter retailers kicks-off this month as the group’s supply deal with the Co-op comes into effect. The deal is expected to lead to the phasing out of Costcutter’s own label range, which will be replaced with the Co-op’s own-label range.
Some Costcutter retailers will also be offered the chance to become Co-op franchisees.
Costcutter Supermarkets Group entered into a supply deal with the Co-op following the collapse of its main supplier, wholesaler Palmer & Harvey, last November.
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arks & Spencer has poached Steinhoff UK’s group chief executive Stuart Machin to
take on the newly-created role of food managing director to help overhaul the retailer’s food division as part of its transformation plan.
Mr Machin joined M&S in late April, with overall profit and loss accountability for all aspects of the M&S food division.
The appointment comes after M&S recently hired grocery supply chain guru Lawrence Christensen to work as part-time independent adviser, focusing on how to best transport food from supplier to store.
Mr Rowe’s overall transformation strategy includes plans to reposition around 25% of M&S clothing and home space through a combination of closures, downsizes, relocations and conversions to food-only stores.
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he Co-op is back in the black after posting a £72m pre-tax surplus in 2017, with improved food sales boosting the retailer’s outlook after a turbulent two years. Like-for-like sales of its food arm increased by 3.4%, marking four consecutive years of growth, although revenue remained flat at £7bn. The return to profitability was hailed as “progress” by chief
Part of M&S chief executive Steve Rowe’s transformation plan for the company is to arrest a slump in trade in its food retail division, which was once star of the business.
Sales in food grew 4.4% in the 26 weeks to September 30, but like- for-likes slipped 0.1%. The recent slowdown prompted M&S to open fewer new Simply Food stores. Mr Rowe said: “We face challenges in our food business and we have lots to do to change, fast. Stuart is an excellent addition to our team. He gets food retailing and he has first class experience of driving change in big food retailers.”
executive Steve Murrells, after the group lost £132m in 2016 after the writedown of its stake in the banking arm, which it has since sold.
The Co-op’s financial report affirmed the group’s 2018 strategy to lower food prices through a £50m investment, as well as push ahead with the opening of 100 new stores. The Co-op has also embarked on a ‘Pay in the aisles’ pilot, allowing customers to use their smart phones to pay for items as they take them off the shelf. The company says it plans to roll out the technology across UK stores this summer.
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cColl’s Retail Group chief financial officer Simon Fuller has stated that the
future for the company lies in being a bigger fresh food business. He said: ‘’The big transformation for us now is to go from what was originally a newsagent business to a convenience business and now to a food business.
‘’We’re in a growing part of the market. If you look at the cyclical trend it tends to be that convenience stores are slightly more immune – smaller basket sizes and we tend to be a little more resilient to the ups and downs in the market.’’
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