Latest News
News Feature image

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.

More News

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."

In a wide ranging interview at Retail Week Live, Tesco's Chief Product Officer Jason Tarry has spoken of how stronger supplier relations are crucial to Tesco's future and provided new insight around its strategy.

Supplier relations: "Great progress but more to do"

Commenting generally on collaboration with suppliers, Tarry said the closer businesses work together "the better we do as joint businesses" In Tesco's case, being closer to the customer and to each other's businesses is helping the retailer to develop and bring forward more relevant and differentiated propositions. He added that more collaborative relationships allowed both parties to work more efficiently together, to create value and share it.

Booker deal welcomed by suppliers

Commenting on suppliers' response to the Booker merger, Tarry said that this had been very positive with suppliers to both businesses seeing the deal as a growth opportunity. Developing the offer together will allow suppliers to take full advantage of Tesco-Booker's increased channel coverage, he added.

Bar Hill: innovative collaboration from Tesco and Booker

When asked about future developments that we can expect at Tesco, Tarry highlighted the opening of the new Chef Central unit for professional caterers at Tesco Extra Bar Hill, Cambridge. For more on this see First look - Booker Chef Central @ Tesco Extra. However when asked about Tesco's reported interest in setting up a discount format, Tarry said that Tesco didn't comment on speculation and said that the business remained focused on ensuring its offer was as relevant as possible for customers and winning in an ever more competitive and dynamic market.

No threat from 'Direct to Consumer' trend

Commenting on the growing trend for FMCG brands to sell direct to consumers, Tarry expressed doubts about the advantages to brand owners. He insisted that Tesco was seeing more of its customers "wanting to consolidate the product search and their shopping experience across and between channels. That could be search online and shop in store, or enter the shop and be able to look online to see if they can widen the choice from what they can buy in store."

Incubator programme selects brands

In a separate development, The Grocer reports that the retailer is backing 14 start-up brands in 2018 through its Tesco Labs project, as part of its wider drive to make Tesco a champion of innovation.  Brands chosen include high protein, low sugar brand WheyHey, sports nutrition brand Grenade, and natural food specialist, Deliciously Ella. All will now have access to resources including workshops, discounted Dunnhumby data, Tesco's media outlets and one-to-one support from Tesco's partnership team.

 

IGD Tesco Business Update 2018

23 May, London

Hear from Jason Tarry, Group CEO Dave Lewis, and Chief Customer Officer Alessandra Bellini, along with other members of the leadership team who will provide a business and commercial update.

Find out more »

Presentations

10/10/2018
An essential summary of trading priorities, latest developments, and other key commercial insights for Booker.
05/10/2018
We explore Tesco's newly released H1 results and the opportunities created by the retailer's contining trading momentum.
03/10/2018
We review five key themes from this year's Convenience Retailing Summit.
View all presentations

Key presentation

This in-depth guide to the United Kingdom explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

An essential summary of trading priorities, latest developments, and other key commercial insights for Booker.

We've developed a single, universal methodology for calculating food and consumer goods retail data, supported by our programme of primary and secondary research. This makes Retail Analysis the most reliable and robust source available for data of this type. 

We've grouped all the latest European retail news, store visits, retailer profiles and downloadable presentations together in one place.