Cost synergies aside, however, it is worth pausing on the manner in which both Lewis and Booker CEO, Charles Wilson presented the deal, especially in light of Wilson’s comments in recent years about the future of the supermarket.
“This merger is all about growth,” Lewis said, before hinting at a myriad of “innovation opportunities” provided by the deal.
Wilson was similarly excited, highlighting the growth in the “out of home” market as a key area of opportunity.
Both men were equally keen to highlight how important it was to keep both the retail skills of Tesco and the wholesale skills of Booker.
“We know the global food market is changing,” Wilson said, adding that in future food providers are going to have to be able to compete in both the “in home” and “out of home” spaces – something this merger facilitates.
“Sweating our capacity allows us to build a more efficient business with a good digital front end which becomes a really compelling offer,” he added.
Wilson has made the point before that the supermarket is an increasingly challenged model and one of the best ways to combat that is to move where the growth is.
Tesco will benefit from a much greater presence in the growing food service market and will add other strings to their bow in terms of service offerings in their larger format stores, while Booker gets its hands on an expanded asset base and improved terms of trade.
There will of course be interest from the competition authorities and likely some store rationalisations before any deal goes through, but it would seem a very interesting step in the ongoing evolution of the food sector.
