Booker catering business down 60% but sales to retailers up 30%

Booker’s sales to retailers during the Covid-19 crisis are growing at around 30%, while the catering business is nearly 60% down, according to Dave Lewis, chief executive of parent company Tesco.

“From a margin mix point of view, catering and delivery catering is a more profitable part of the Booker mix and therefore there is some challenge in the mix as we go forward,” he commented.

Booker has faced criticism from customers that, during the pandemic, the group has been focusing on Tesco at the expense of Booker, with Booker staff redeployed to support Tesco’s distribution network, reduced cash & carry opening hours, and significant out of stocks at the C&C branches. On the availability issue, Lewis said that the “whole group is being used to recover supply”.

Lewis’s comments were made following an announcement of Tesco plc’s results for the year to 29 February 2020.

Booker’s sales increased from £6.098 billion to £6.204 billion. On a like-for-like basis, sales were up by 3.3% but on a comparable days basis (accounts were measured at 53 weeks in the most recent financial year versus 52 weeks previously), sales rose by 3.8% excluding tobacco (2.9% including tobacco).

Booker progress highlighted in the results included leveraging the Tesco network, relaunching the Booker website, and rolling out the ‘Top up at Tesco’ scheme which allows Booker catering customers to use their reward card at a Tesco till.

In addition, Booker’s acquisition of Best Food Logistics was completed in March 2020 “for a nominal consideration” and this, according to Lewis, “will provide more customers with the benefits of the sourcing capabilities of the wider Tesco business”.

Although specific profit figures for Booker were not reported, Lewis said that the C&C/wholesaler was growing ahead of the wholesale industry: “The challenge of a weak market in both the wholesale and catering sectors was exacerbated by the effect of the clearance of excess stock that had been built up in anticipation of Brexit disruption. Despite these challenges, Booker’s profit growth (including synergies) outperformed the industry as a whole.”

Tel: Booker (01933) 371000