After a brilliant career Charles Wilson has announced his retirement from Booker Wholesale. Will his retirement signal the absorption of Booker into Tesco at the expense of its wholesale customers? David Gilroy ask the question.
A few years ago I was privileged to secure some project work with Booker. Having worked in wholesale for some time I hoped to gain some insights into the inner workings of an industry leader. What I got was a master class in leadership.
It is no accident that under Charles Wilson, the company has been transformed from a basket case to a real force in wholesale today. Looking at the business from the inside four things struck me: the effectiveness of internal communication, the continual drive to keep the business simple, the clarity of roles and responsibilities and the unswerving focus on customer service. A lot of businesses talk about “putting the customer first” or being “customer centric” but not all implement it. In Booker’s case they really live it.
Customer service informs all the key decisions. It is imbued in the culture all the way through the line from the top. Charles himself is brilliant at connecting with people at all levels. I was lucky enough to see him at close quarters with customers. He is all about listening, taking notes and finding out what more Booker can do for them. His notes are followed up and acted upon.
Under Charles Wilson’s leadership we have seen Booker acquire Blue Heath, Makro, Londis, Budgen et al. Each move carefully calculated to enhance the capability and reach of Booker. Culminating in the monster deal with the Tesco acquisition of Booker. This frame-breaking take-over has changed the grocery industry forever. So what happens now that Charles Wilson is moving on? Will this signal the Tescoification of Booker to the detriment of its customers?
What makes the Tesco and Booker deal so special is that they are perfectly aligned. Read Dave Lewis’s “exit interview” in The Grocer and he too talks a lot about looking at the business through the lens of a customer. Both companies also happen to be highly profit focused. Under Charles Wilson Booker steadily grew its profits and Tesco has just announced a 29% increase in profits in the first half of this year. Being the largest players in their respective markets both Tesco & Booker are in a position to drive sales through service, reliability and choice.
Its inventory management and stock availability are already best in class and Tesco will cement this by exerting its size in the market. When it comes to stock security, if Brexit causes availability problems Tesco/Booker will be the least affected – that’s real competitive advantage. Rivals are already complaining that Tesco is capturing exclusive NPD for Booker not available to other players across wholesale.
We are just beginning to see the Tesco power coming through in the Booker business. The slogan: “Bigger Group Better For All” over arches a number of new value-drivers for customers. Booker customers can now shop in Tesco and collect 3% cash back vouchers for redemption in the wholesaler. This initiative will appeal particularly to caterers who tend to spend less per visit and shop more frequently across channels. Here’s another; Booker customers can save up to £70 on business pay monthly contracts with Tesco Mobile.
We are witnessing a significant trend in the convenience market with multiple brands entering the format. Nisa/Co-op and Simply Fresh/Sainsbury’s are proving popular with both storeowners and consumers. Tesco has experimented with “Jacks” products in One Stop and now Booker is rolling Jack’s products across Londis & Budgens stores and has recently opened the first ‘Jacks” fascia store in Scotland. How long before Tesco makes its core brands available in Booker?
Booker maybe a subsidiary of Tesco but the evidence is that they are very serious about delivering brilliant customer value through the wholesaler. The bar will be set high and they will continue to be a formidable competitor.
David Gilroy is the founder and managing director of Store Excel