McColl’s CEO Jonathan Miller said he would be open to a supply deal with Booker.
At an investor conference with IGD, Miller said that, following the Tesco merger, McColl’s might strike up a wholesale partnership with Booker.
“We’ve long felt there will be consolidation in wholesale supply to UK convenience and that makes us the biggest asset out there in terms of volume,” said Miller.
“Why wouldn’t we in the future, if we chose to, tap that extra buying power that Booker has accessed through Tesco?”
In its recent preliminary results, Booker CEO Charles Wilson said he expected the CMA process to be complete by the end of this year or early 2018. McColl’s current supply contracts with Nisa and P&H expire in March next year.
Earlier this month, The Grocer revealed McColl’s plans to trial a 25-store supply deal with the Co-op, which will see own-label Heritage and Independent brands from its current suppliers replaced by Co-op branded products.
Miller also addressed reports in The Telegraph stating the McColl’s boss had One Stop “firmly in his crosshairs”. Although Miller said he would be interested in purchasing the business, it is not available for sale. “It’s been widely reported this morning that we’re about to launch a bid for One Stop,” quipped Miller.
“I think the question I was posed was, ‘If One Stop were to become available, would you be interested in buying it?’ I said, of course I would. I think the One Stop business is very similar to our own. It would be another perfect fit for our business just like the Co-op stores.”
Broker Peel Hunt said: “While the CEO maintains he always felt confident further acquisitions were possible, we believe that the confidence gained from the early rebadged Co-ops have reinforced that view, given his candid remarks in the weekend press.
“For what it’s worth, we believe that a deal with One Stop would be an obvious route to adding value: of course the risk profile changes, but additional scale is key in the this market, and the One Stop stores would further transform the transformed.”
McColl’s said within a full year of trading, the 298 Co-op stores purchased last July would add 30% to its sales, 40% to its profits and grow turnover to over £1.5bn.
“Our priority is on-boarding The Co-op stores but after that we’re getting back on the acquisition trail,” said Miller.
“We’re targeting around 40 to 50 stores per year. Some 34,000 of the convenience stores in the UK are independent: that’s 34,000 opportunities to become a McColl’s.”
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