Click and collect expansion is key part of Tesco/Booker takeover strategy

Tesco CEO Dave Lewis has told City analysts that the expansion of its Click and Collect network is a key part of the supermarket’s strategy for its proposed acquisition of Booker. As Post&Parcel highlighted in our coverage of the Tesco bid for Booker last month, Booker not only has a powerful food wholesale network but it also has the Premier, Budgens and Londis chains of convenience stores.

Collectively, these chains encompass around 4,000 stores.

Tesco itself already has about 3,500 stores.

So if the Tesco/Booker merger is approved by the authorities and no divestments are required (these are quite big ifs), Tesco could end up with a network of almost 8,000 stores which could be used as click and collect points.

The Londis stores work on a franchise system, whereby the stores are owned independently by the retailer.

In his conference call with City analysts, Lewis argued that the expanded click and collect network would be beneficial to both Tesco and the independent store owners.

““Consider the idea that through this merger and through a network of close to 8000 click-and-collect points we would drive traffic to those independent stores as a way of giving more service from the combined operation,” Lewis was quoted as saying.

One of Tesco’s key rivals in the supermarket arena, Sainsbury’s, expanded its click and collect capabilities significant last year with its acquisition of Argos. Following Tesco’s move on Booker last month, reports have been circulating that Sainsbury’s might be eyeing a merger with Morrisons.