Wholesaler Booker will update on trading on Thursday amid mounting calls for a competition inquiry into its £3.7 billion merger with supermarket giant Tesco.
Morrisons chairman Andy Higginson, who is also a former finance director at Tesco, was the latest to wade into the debate, saying earlier this month that the tie-up will “exert even more power over thousands of retailers” and warning it could be harder than expected to clear competition hurdles.
Tesco and Booker have so far played down competition concerns, claiming that Booker’s network of stores is almost entirely made up of franchisees operating independently.
But the Competition and Markets Authority (CMA) is widely expected to launch a probe soon.
Booker is the country’s largest wholesaler and owns the Londis and Budgens convenience store brands, as well as Happy Shopper and Premier.
While Tesco is mainly a food retailer, it does also own the One Stop convenience store chain that effectively competes with Booker.
Tesco said on announcing the deal, which the pair are billing as a merger, that it will create “the UK’s leading food business” and deliver cost savings of £200 million for the combined group.
The companies said the deal would bring “benefits for consumers, independent retailers, caterers, small businesses, suppliers and colleagues, as well as delivering significant value to shareholders”.
Booker’s chief executive, Charlie Wilson, who will join the combined group’s board and executive committee, said of the deal at the time:“Booker is committed to improving choice, prices and service...we think it is pro competition; the CMA will go through what it does, but we’ve had good advice on this.”
Booker’s fourth quarter update meanwhile will reveal if the group managed to maintain the solid trading seen in its third quarter, when like-for-like sales rose 3.2%.
A 1% fall in tobacco sales offset an otherwise impressive 5.1% non-tobacco sales hike.
Booker sells branded and own-brand goods to around 120,000 retail customers, 450,000 catering customers and 700,000 small business customers.
It has around 200 stores in the UK and around 18,000 product lines.
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