Tesco's acquisition of T&S Stores has been a hot topic in the industry and in the press. Opponents of the deal claim it will damage suppliers and independent retailers and be bad for the consumer.
Those in favour believe the move will bring an additional and positive dimension to a thriving convenience sector.
We asked members of Leading Edge ­ young managers in the grocery industry ­ for their views on the takeover.
The online poll received 159 replies, 62% were from the manufacturers/suppliers side, 23% from retailers and the remaining 16% were made up from other sectors such as packaging, logistics and foodservice companies.
Nearly 70% of Leading Edge respondents think the tie-up will be good for consumers because it will offer more choice, quality and value. Only 23% think consumers will lose out as a result of the acquisition.
The following quotes are a selection from their views expressed in the poll:
n "The consumer may believe that Tesco, via Express stores, will provide a better and lower cost shopping trip due to current loyalty and trust. There seems to be a perception among consumers that independents and corner shop retailers are more expensive. This can only help Tesco with its convenience and local formats and put more pressure on existing retailers in this arena."
n "Tesco will bring some much needed consistency, standards and quality to a sector that, with few exceptions, is lagging grocery. For too long convenience stores have offered poor quality at rip-off prices."
n "I think Tesco's takeover is positive, because convenience stores tend to be overpriced. If I only want a small amount of goods I prefer smaller shops. They are less time consuming, but I am put off by price and range."
There was an even divide over whether the acquisition would give Tesco an unhealthy share of top-up shopping.
Respondents' views include:
n "For independent or small operators it is potentially damaging given the share and power that Tesco exert on the total UK grocery market. They will need to focus more on service and joining buying groups to generate significant economies of scale to help compete."
n "The convenience market is highly fragmented so an acquisition of a company the size of T&S should not really affect competition too greatly."
n "It is understood that Tesco's intentions are to grow. Tesco has already ventured into the convenience sector and intends to develop it. The days of small independent traders are over ­ it is now time the multiples took over in order to deliver unbeatable value for the British public."
Nearly a quarter of survey respondents think the acquisition will create opportunities for T&S suppliers that do not currently supply Tesco to start a relationship with the retailer. However 44% think the acquisition will threaten existing supply deals. A further third reckon it is too soon to tell which way it could go.
The survey also asked which company made the best deal in the convenience sector in 2002. Just under half (47%) said the Co-operative Group's acquisition of Alldays was the best move, closely followed by Tesco and T&S with 38%. Fifteen per cent think Musgraves has come up trumps with Budgens.
One respondent said: "Tesco's increased presence in the convenience market will lead to lower prices and improved choice for the consumer. However, the complexities and vagaries of the channel do not make the acquisition such a win for Tesco itself. The recent Co-op/Alldays link will provide a stronger business platform."
More than two thirds think another major multiple will move into the convenience sector in 2003.