Tesco Booker figures shed light on COVID wholesale impacts

Patrick Mitchell-Fox
Senior Retail Analyst
@RetailAnalysis

Date : 26 June 2020

Data shared by Tesco in its Q1 performance update to 30 May provides the first public statement showing detail of the full impact of the pandemic emergency on the wholesaling channel, indicating the specific scale of the asymmetrical effects on retail versus foodservice business.  With total sales for the period boosted to 6.1% by the acquisition of Best Foods in March, Booker’s net like-for-like was just 0.6%.  This disguises massive growth of 23.5% to customers in the independent retail channel, while sales to catering and foodservice customers plunged by 32.1%.  Total value sales for the period were £1.6bn.

Sales in retail channel continued to accelerate through period

Plotting the progress of sales growth through the period the figures provided by Tesco show Booker's retail chnnel sales leaping to +16.0% in early March as stockpiling drove increased consumer purchasing.  However, the data also shows that sales into retail business further stepped up to +26.8% as the lockdown was imposed and then moved even higher in the course of May to end the period on +30.0%.  The rapid growth has come through both the cash & carry and delivered sides of the business, with Booker retail partner stores (under the Budgens, Londis and Premier fascias) and mostly serviced by delivery, achieving sales growth of 23.5%.  The growth of stores serviced in the independent channel is significantly above that of the corporately-run convenience estate (Tesco Express and One Stop), which was ‘just’ +9.9%.

Business with pubs hit hardest on foodservice side

Having seen business drop away even before the lockdown (-23.1%), Booker’s sales to its catering customers collapsed by 68.2% from March into April, before beginning to recover slightly as elements of restrictions on business started to be eased in May.  However, despite this change in direction sales to catering customers still ended the period down 61.3%.  Amongst Booker’s major customer groups sales to pubs were down 63% over the quarter, while sales to takeaways, where opportunities to keep trading were better, were down by 32%.

Market share increased in all channels

Despite the extensive disruption to the foodservice side of its business, Booker believes that it has gained over 10 percentage points of share in the foodservice channel in the course of the COVID episode, pushing its participation to 19% come the end of May.  The business also believes it is well positioned to gain further, going forward.  As a major supplier to takeaways (and of associated takeaway supplies) Booker should indeed be well placed to benefit from the dash to takeaway operations now being seen across the UK's out-of-home market.  Share gains in retail channel business has pushed Booker up to an estimated 25% of this sector.  Overall Booker estimates that it currently holds 23% of the overall UK wholesale market.