Booker to buy Londis & Budgens chains for £40m

Booker, which operates more than 172 wholesale outlets and supplies more than 129,000 independent retailers, will acquire the supermarket brands in the UK from the Irish food wholesaler Musgrave Group.

The Guardian are reporting that Booker have said the deal would upgrade the efficiency of the two brands’ supply chains amid changes in the grocery industry, including intense price cutting at major supermarkets in response to the growth of discounters Aldi and Lidl.

Londis, which operates 1,630 convenience stores, reported sales in the year to December of £504m. Budgens, a franchised chain with 167 outlets, racked up sales of £329m last year.

Musgrave Retail Partners , which held the brands for its parent firm Musgrave, posted sales of £833m in the year to December and made an operating loss before exceptional items of £7.4m.

Booker said the Londis and Budgens brand names would remain, and would sit alongside its retail brands, Premier and Family Shopper. Its chief executive, Charles Wilson, said: “Booker, Londis and Budgens are joining forces to help independent retailers prosper throughout Great Britain.

“This transaction should strengthen Londis, Budgens, Premier, Family Shopper and other Booker retailers, through improving choice, prices and service to consumers. Overall it will help independent retailers prosper.”

Booker said completion of the deal was conditional on the approval of the Competition and Markets Authority. It expects the acquisition to be earnings neutral in the first complete year of ownership and earnings enhancing thereafter.

The deal comes as Booker announced its full-year results.