Tesco and Booker
This morning’s announcement has surprised everyone and reflects a shift in strategic thinking at Tesco. Previously, it has been looking beyond its backyard. People might think restaurants and coffee shops are close to home but their business models are totally different and not surprisingly, didn’t really work. In fact even Dobbies, the garden centre business and certainly a retailer, proved to sit outside Tesco’s skill set and was sold last year.
The attractions of Booker are clear. Whether the competition authorities will sanction the deal is another matter. History shows that they can sometime adopt rather perverse definitions of markets, betraying an inability to fully understand how the people they are meant to be acting for (shoppers/consumers) actually behave. This instance should be easier than many – Tesco already has a huge share of the convenience market and this would give them a substantially bigger one. It would also give the company considerable influence over independent retailers. Some of these might think they didn’t sign up to this and rail against the idea.
Perhaps the most intriguing question raised by this deal, if it happens, is what happens to Charles Wilson, CEO of Booker? In a retail era where leadership has been dumbed down and true commercial skills have become a rarity, Charles Wilson is truly outstanding. He has a unique combination of strategic and operational skills coupled with a tiny ego which lets him put the business and its needs before all others. He is a leader who can truly transform any business – just look at what he has achieved with Booker.
** We advise retailers on strategy and analytics. We also track promotional activity across the UK’s key retailers. Get in touch for details admin@richardtalksretail.co.uk