Tesco chief exec

Tesco has shrugged off the threat of increased competition from supermarkets that have entered independent wholesale as rivals to Booker

Last week, the supermarket released its financial results for the 13 weeks ending 28 May 2022. 

The figures come after Asda and Morrisons ramped up their independent wholesale businesses in recent months. 

Asked by betterRetailing whether this poses a major threat to Booker, Tesco chief executive Ken Murphy said: “We are mostly focused on our retail and catering customers and we don’t worry about our competition too much. 

“This is not from a point of arrogance, but a point of focus. We make sure to look after our customers day in and day out with the highest levels of availability, value and top-quality service. This has put us in good stead through the pandemic to now. 

“Booker has performed well in the market, which was partially due to a lapsing of lockdown last year. We can see an underlying trend within the Booker business and we feel really good about the market. 

“We offer a great proposition to independent retailers through the various different [symbol groups] and we’re feeling good overall about the wholesale business.” 

The results revealed like-for-like sales within Booker had grown annually by 19.4% to £2.1m during the 13-week period. 

On a three-year basis, this represented an increase of 9.9%. Retail sales within the group also rose by 2.3% annually. 

Commenting on the growth, Murphy added: “Booker is winning customers for several reasons. It has got the best availability and service levels across the market. 

“Customers are coming because we have the products. We’re also competitively priced. We’re not leading in price, but we are very competitive. 

“The other thing to consider is that Booker has worked very closely with its customers.” 

Elsewhere across Tesco’s own business, convenience outgrew its larger supermarkets on a one-year like-for-like basis. 

Convenience grew by 6.2%, while supermarkets declined by 0.7% during the period. “We have seen our convenience business getting stronger,” said Murphy. “What we’re seeing is a higher frequency in the number of shopping trips, but basket sizes coming down a little bit.” 

Murphy also highlighted the pressures associated with recent inflationary issues. 

Asked how Tesco was negotiating prices with suppliers, he added: “We’re pleased with the standing we’re held in by suppliers. Undoubtedly, inflation is raising tension because there’s pressure on the supply chain for every business. 

“What we’re committed to doing is working with suppliers to try and mitigate costs, so they can be the lowest they can be at the time.” 

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