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The franchise network of Tesco subsidiary One Stop, now comprising 180 stores, has reported that these averaged like-for-like growth of 6.8% in the final quarter of the 2018/19 year to March.  This completes a run of 16 consecutive quarters of growth for One Stop.

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Speaking at Tesco's Q1 results call, CEO Dave Lewis provided new detail about how Tesco will ramp up the development of the Chef Central concept it has acquired through Booker. Booker sales grew by 14.3% in Q1, driven by a strong underlying performance and new business wins.

Second Chef Central opened

Following on from its pilot using the former Dobbies unit at Bar Hill Extra, Tesco has just opened a second store at Gallions Reach, East London. Unlike Bar Hill, this unit is fully integrated into the main store with shoppers able to pay for Chef Central lines at the main Tesco checkout. The new format has significantly lower set up costs than Bar Hill so the return on investment should be shorter than the six months for Bar Hill.

Booker range rollout to 50 Tesco stores

Encouraged by initial results, Tesco now plans to launch big pack grocery aisles at 50 larger stores across the UK. The new aisles will take underused space at some of Tesco's largest stores to make them a destination for bulk buy customers, both professional caterers and everyday shoppers. Tesco will continue to experiment with the Booker range it takes into its stores, adapting it to local preferences. To date, Tesco says 75% of the range is working well but 25% of is tweaked as it is taken to different stores.

For more on Tesco's Q1 results click here.

To see our report from the Chef Central at Bar Hill Extra click here.

Londis, part of Tesco subsidiary, Booker's symbol group retail network, has reported record sales growth for the 2017/18 financial year, with non-tobacco category sales up 26% and tobacco up 16%.

Boosted by 300 new member stores 

With total group store numbers now approaching 2,000, Londis has benefited especially from a number of group contract wins by the wider Booker business, especially in the forecourt (gas station) sector.  As well as supplying the dealership group MFG, Booker has also won deals with MRH and Shell, representing a total of almost 1,000 additional retail sites.  Where suitable these retailers are converting some stores to the Londis fascia.  In total Londis is now present on over 900 forecourt sites, second to SPAR in brand prevalence in the sector.

Martin Swadling, Brand Director, Londis commented:

'As well as attracting new independent retailers we are also privileged to be partnering with some prestigious group accounts.  We are pleased to be helping our retailers make more and save more ... and I'm looking forward to continuing to serve them especially as we move into the busy summer period.'

Booker symbol at the IGD Convenience Summit 2018

In a dedicated focus session on 26 September, hear from Managing Director for Retail, Steve Fox and the brand directors of each of the Booker fascias, as they move into a new period of development in partnership with Tesco. 

 

IGD Convenience Retailing Summit 2018


 

26-27 September, London

 

Convenience continues to outpace big store formats. This year we have launched a two-day event to help you explore every opportunity, possibility and future trend to boost your business.


Find out more »

Tesco has reported encouraging Q1 trading lifted by very positive initial results from newly integrated Booker. Group LFL sales increased by 1.8% in the 13 weeks to May 26th, representing a 10th consecutive quarter of growth.

Headline results

  • UK and ROI sales ahead by 3.5% boosted by 14.3% growth at newly integrated Booker
  • UK sales +2.1% down from 2.3% in Q4 but impacted by timing of Easter and weather impact
  • Central Europe LFL -1.0% impacted by regulatory challenges
  • Asia LFL -9.0% with sales trend improving following withdrawal from bulk selling activities

Resilient performance in the UK

The UK performance was lifted by three major initiatives. During the quarter Tesco forged ahead with the rollout of its own brand renewal programme. 2,850 products have now been relaunched to date, putting the business on track to relaunch the entire 10,000 product range. Within this, Tesco has stepped up price investment in its exclusive fresh food brands and recently begun introducing exclusive value brands into grocery. Another major development in the quarter was the decision to close the Tesco Direct non-food online business after a review concluded it had little chance of becoming profitable. Tesco will instead non-food categories such as toys, cookware and homeware into tesco.com, which experienced a strong quarter with growth in transactions and basket size. Looking ahead, innovation will be an increasing focus for Tesco. The bringing together of product development teams at its new Heart building in Welwyn should drive innovation and boost efficiency.

Strong growth at Booker

Booker's growth of 14.3% (12.4% excluding tobacco) was driven by a strong underlying performance and new business wins. Following encouraging initial results from the pilot Chef Central unit at Bar Hill Extra, Tesco has now opened a second unit in Beckton, East London. Tesco has also rolled out its trial introduction of 30 top selling Booker lines to 50 more Tesco stores. Booker lines are also being introduced into Tesco distribution centres to improve availability, a move that will support the rollout of Booker lines into more Tesco stores.

Underlying progress in central Europe

In Central Europe, sales were impacted by new Sunday trading regulations in Poland and public holidays in Slovakia. However the underlying performance was strong in fresh food and trading improved in Hungary.

Improving performance in Asia

Asian sales improved towards the end of the quarter following the annualisation of the ending of bulk selling activities in April. However the issuance of government welfare cards that cannot be redeemed in modern retail chains and continued price investment by Tesco impacted trading. That said, the pace of sale decline in Asia eased through the period. and fresh food performed strongly with LFL growth of 4.5%.

"Growth plans on track"

Commenting on the results CEO Dave Lewis said "Our growth plans are on track and we are pleased with the momentum in the business. We remain well-placed to serve our customers better and deliver on our medium-term financial ambitions. We are delighted with initial progress on Booker, and are focused on delivering the synergy benefits that our merger brings."

Presentations

03/05/2019
An essential summary of trading priorities, latest developments, and other key commercial insights for Booker.
25/03/2019
Following a year of unprecedented changes in ownership and supply, we show how the UK symbol sector has been altered, with new influences now taking a major role in shaping its future.
19/11/2018
We explore the formats that make-up the UK's largest symbol group network highlighting the focuses for future development.
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