The recent flurry of takeovers in the c-store sector is just the tip of the iceberg and consolidation is inevitable, according to leading independent retailers.
In a poll of The Grocer’s Top 50 independents, 93% said they had received interest in their business in the past year, and 64% said they expected to be approached about a takeover within the next 12 months. Every retailer said there would be more consolidation.
“The multiples and the Co-operative Group are desperate to gain larger shares of the convenience market,” said a retailer. “And, if allowed by the Office of Fair Trading, they will between them swallow up huge swathes of the market.”
2However, some said inquiries from the multiples were not always genuine, but instead they were on fact-finding missions.”
Some multiples have contacted me about sites, only to open a store a few months later down the road from mine,” said another retailer.
In the last month takeover bids for three members of the Top 50 have been reported. Adminstore received an offer from Tesco, Fresh & Wild fell into the hands of US organics retailer Whole Foods Market and CJ Lang is currently negotiating a deal to buy fellow Top 50 member AJ Gillespie.
But it is the encroachment of the multiples that worries leading independents, with 79% concerned by the likes of Tesco acquiring independent retailers.
“Inevitably the independents left will be squeezed and even the symbol groups such as Nisa and Spar will struggle to compete with the very large retailers,” said one.
Others expressed concern that the multiples would reduce the buying power of groups such as Nisa-Today’s and ‘direct to store’ suppliers, such as chilled van sales, and further reduce the critical mass needed for the independent sector to compete.
Regarding Tesco’s proposed acquisition of Adminstore, 71% said the OFT should block the deal. “Multiples must be limited to 5-10% of the convenience market,” suggested a retailer. “It needs to view the food industry as a whole and not create segmentation - a Mars Bar is a Mars Bar wherever it is sold.”
But another said: “While I would prefer less competition, I can’t think of a genuine reason why Tesco shouldn’t be given the go ahead by the OFT. Its growth is inevitable and, to be frank, it is in the consumer’s interest.”
n See next week’s edition of The Grocer for the latest listing of the Top 50 independent stores.
Sean McAllister
In a poll of The Grocer’s Top 50 independents, 93% said they had received interest in their business in the past year, and 64% said they expected to be approached about a takeover within the next 12 months. Every retailer said there would be more consolidation.
“The multiples and the Co-operative Group are desperate to gain larger shares of the convenience market,” said a retailer. “And, if allowed by the Office of Fair Trading, they will between them swallow up huge swathes of the market.”
2However, some said inquiries from the multiples were not always genuine, but instead they were on fact-finding missions.”
Some multiples have contacted me about sites, only to open a store a few months later down the road from mine,” said another retailer.
In the last month takeover bids for three members of the Top 50 have been reported. Adminstore received an offer from Tesco, Fresh & Wild fell into the hands of US organics retailer Whole Foods Market and CJ Lang is currently negotiating a deal to buy fellow Top 50 member AJ Gillespie.
But it is the encroachment of the multiples that worries leading independents, with 79% concerned by the likes of Tesco acquiring independent retailers.
“Inevitably the independents left will be squeezed and even the symbol groups such as Nisa and Spar will struggle to compete with the very large retailers,” said one.
Others expressed concern that the multiples would reduce the buying power of groups such as Nisa-Today’s and ‘direct to store’ suppliers, such as chilled van sales, and further reduce the critical mass needed for the independent sector to compete.
Regarding Tesco’s proposed acquisition of Adminstore, 71% said the OFT should block the deal. “Multiples must be limited to 5-10% of the convenience market,” suggested a retailer. “It needs to view the food industry as a whole and not create segmentation - a Mars Bar is a Mars Bar wherever it is sold.”
But another said: “While I would prefer less competition, I can’t think of a genuine reason why Tesco shouldn’t be given the go ahead by the OFT. Its growth is inevitable and, to be frank, it is in the consumer’s interest.”
Sean McAllister
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