Wholesaler Booker hails record sales despite fourth quarter slowdown
Wholesaler Booker has hailed record sales despite a fourth quarter slowdown as it prepares for its £3.7 billion merger with supermarket giant Tesco.
The chain saw like-for-like sales growth slip to 0.7% in the 12 weeks to March 24, down from 3.2% in the previous three months, as trading was dragged lower by falling tobacco sales.
Non-tobacco sales growth of 4.7% was offset by a hefty 7.5% plunge for tobacco sales as the tobacco display ban and new plain packaging rules hit the group.
But annual total store sales were still 6.7% higher at £5.3 billion, with like-for-like non-tobacco sales up 2.8% and tobacco sales down 4.6%.
Charles Wilson, chief executive of Booker, said: "Overall, 2016/17 was a good year.
"Customer satisfaction was good and sales were the best we have ever achieved."
He added it was "business as usual" ahead of its tie-up with Tesco, as the merger goes through the competition process with authorities.
The Competition and Markets Authority (CMA) is widely expected to launch a probe into the deal soon amid unrest from rivals over the combined power of the group.
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.
Booker is the country's largest wholesaler, with around 200 stores in the UK, 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 which effectively competes with Booker.
Morrisons chairman Andy Higginson, who is also a former finance director at Tesco, was recently reported as warning that the merged group will "exert even more power over thousands of retailers" and said it could be harder than the pair expect to clear competition hurdles.
Clive Black, retail analyst at Shore Capital, said Booker's fourth quarter sales result was a "very good performance" after a strong third quarter.
On the Tesco deal, he said it would be "non-transformational for Tesco and possibly a big risk for Booker".
He added: "The potential merger with Tesco is going to be a potentially time consuming process, subject to the vices and vagaries of the UK CMA."