The Grocer news team
Tesco won't find convenience retailing as easy as it thinks warned industry chiefs following its bid to buy an 862 storechunk of the market.
AF Blakemore retail director Elwyn Davies said: "This is only bad news for bad independents out there.
"If Tesco thinks it can operate a 1,500 sq ft store with the same overheads as a 50,000 sq ft store, it will get a shock."
And the c-store sector is prepared if Tesco turns the screw on T&S suppliers, said Davies. "That's fine as long as they don't come knocking at our door to make up where they lose out with Tesco.
"And I'm putting out a health warning to that effect. The Spar brand is strong and bold enough to withstand anything Tesco can throw at it."
Spar chief executive Jerry Marwood said the Co-operative Group buyout of Alldays was not a surprise but the Tesco bid was. "It shows the opportunity in c-stores and highlights the buoyancy of the market. We have to make sure that we're fit enough to compete and I'm confident we are."
Safeway marketing and trading director Jack Sinclair said he was surprised by the deal, Tesco's first foray into true neighbourhood retailing. "There's no way all their convenience stores are right for Tesco. I would be surprised if they didn't sell off a few."
However, Musgrave UK executive chairman Eoin McGettigan said it was "not a great day for the independent sector. Tesco has been buying on preferential terms and has used this to mop up the competition. Having fewer players is not good for consumers or suppliers."
It has also been revealed that Tesco's hand may have been forced by rivals' interest in T&S Stores.
Sinclair said Safeway had looked at both Alldays and T&S, before deciding to focus its convenience offer on city centres with a target of 100 stores over two years.
Analyst Nick Jones of Goldman Sachs agreed Tesco had been forced to act in haste. He said: "Other people were looking at T&S as well as Tesco. It was now or never."
Tesco said organic growth would continue through the roll out of Express forecourts and standalone sites at the rate of one a week.
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