An expansion of Booker’s ‘dark hub’ trial to improve deliveries to retailers has not been ruled out. In February, the wholesaler converted a Makro branch in Stoke into a distribution centre, with the purpose of improving deliveries to its Premier customers.
When asked by betterRetailing to comment on the performance of the site during a presentation on the supermarket’s annual results, Tesco chief executive Ken Murphy said: “Our new retail hub in Stoke has been performing really well and we’re very pleased with it.
“It has the double whammy effect of giving retail customers outstanding service and freeing up capacity in our other distribution centres to provide more space for Booker’s growing catering business.
“There’s scope for one or two more dark hubs, but we’ll have to wait and see. We want to monitor the process, as the Stoke site hasn’t been open for long.” Despite Murphy’s comments, one Premier retailer served by the Stoke site, who asked not to be named, said they had experienced late deliveries. They told betterRetailing: “You can’t really criticise Booker, as new projects always have teething issues, and I’m sure these will be resolved soon.”
In the results for the year ending 26 February, 2022, Murphy revealed Booker added 283 Budgens and Londis stores during the period. One Stop is also on track to reach 1,000 stores following the addition of 59 shops across the year. Annual like-for-like sales across Booker Group also rose by 15.3% to £7.7bn. This was an 11.9% rise on a two-year basis.
“The fact we were able to grow retailer numbers on top of a big year previously is just a testament to how compelling the Booker offer is,” said Murphy. “We saw a modest increase in franchisees across all the different symbol groups over the year. The real success was the catering business, where we saw a significant increase as the market went back to eating out.” Retailers and wholesalers have also reported seeing shrinking margins on price-marked packs (PMPs) due to widespread inflationary pressures.
Commenting on how Tesco and Booker are using their combined buying power to prevent a squeeze on shared margin for independent retailers, Murphy said: “It is a dynamic situation. PMPs lock prices in to a certain extent, and we expect our suppliers to honour that. It’s an ongoing discussion we have with suppliers. “The areas under the most pressure are products such as milk and sunflower oil. In terms of commodities, the products with the highest energy costs to produce are where we’re seeing the greatest squeeze.”
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