Thursday, 21 May 2015 20:10

Takeover 'will benefit village shops'

Written by  Ruralcity Media
Takeover 'will benefit village shops'

VILLAGE shop owners say rural residents will benefit from the £40m takeover of convenience store chains Londis and Budgens.

Booker Group, Britain's biggest cash-and-carry wholesaler, has agreed to buy convenience store chains Londis and Budgens from owners Ireland's Musgrave Retail Partners.

The vast majority of the 1800 stores operating under one or other of these fascias are franchise operations run by independent retailers.

News of the takeover has been welcomed by the Rural Shops Alliance – which is the national voice for about 7,500 rural retailers.

The RSA campaigns on behalf of rural retailers and help these shops become more competitive with practical advice and support, to the benefit of thousands of rural communities.

RSA chief executive Ken Parsons said: "We believe that this is great news for the convenience store sector.

"With intense price competition in the marketplace, it is essential that smaller shops do not get left behind as the big supermarkets battle for market share.

"They can only do this if they are able to buy their stock at competitive prices from their wholesale suppliers."

Currently the market was too fragmented, said Mr Parsons. The key to it was economies of scale, to be able to order stock by the truckload rather than by the pallet.

Another important aspect was that over 40% of groceries sold were now retailers own labels.

"It is vital that independent retailers are able to access good suppliers' labels and we very much hope that this will be made easier through this deal."

Mr Parsons said he believed that combining the buying power of Booker with that of Londis and Budgens was an important step towards achieving these important objectives.

He said he would echo the words of Charles Wilson, chief executive of Booker, who said in a letter to Londis retailers that the takeover would bring widespread benefits.

Mr Wilson wrote: "We really believe this is a win for you, a win for the consumer, a win for the supplier and a win for the Londis businesses."

The deal does have to be approved by the Competition and Markets Authority.

Given the current state of the grocery market, Mr Parsons said he would "very much hope that this is merely a formality and that Booker can get on with all speed at reaping the benefits from it."

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