Glynn Davis
Tesco officially took over the reins at new acquisition T&S Stores on Monday ­ a move that could signal the start of a new era for convenience stores.
Jim McCarthy, former chief executive of T&S Stores who is the transitional advisor, handing over the running of the business to new CEO Colin Holmes, predicts major changes ahead and issued a warning to the sector.
"It marks a step change in convenience retailing, particularly in food convenience.
"Other outlets and retail groups must sit up and take note and have the right range at the right price and in the right places. If they do this then they can be successful, but if they don't, then they will fail."
He added: "The whole industry is in a period of rapid change. If you are not evolving at a rapid rate then you will not keep up with your changing customers."
McCarthy praised Tesco for having the foresight to "back its judgement with such magnitude" and suggested that the purchase of the T&S estate of 850 stores would make it difficult for rival supermarket groups to make any impact in a sector renowned for being fragmented.
"There are no other chains with scale and this will slow down the progress of everybody else. Going forward, the major food retailers will have to look more at convenience but Tesco has had the foresight to enter the market with a quantum move. It has taken the lead and can now exploit this market."
As well as its extensive store portfolio, McCarthy said that another attraction of T&S for Tesco was the knowledge it would gain of operating smaller stores. "It has far less recent experience of running small stores and at T&S we have these skills and a team that's good at it. I think they will learn quite a bit from us ­ as we will also learn from them," he predicted.
McCarthy said there had already been expressions of interest in the Dillons newsagent and Supercigs tobacconist chains that Tesco intends to sell.
With Holmes now officially CEO of T&S Stores, McCarthy said he was unsure how long his role would continue at Tesco. "They have a new CEO so my stay could be months rather than years.
"After the transition period Tesco will say if there is a role elsewhere within the group."

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