Sean McAllister andElaine Watson
T&S boss Jim McCarthy has revealed how a weakness in the company's chilled and fresh offer ultimately led to Tesco's takeover bid.
T&S approached the major multiples, including Tesco, for a partner to bring their own brands into its chiller cabinets, where the chain lacked a credible range.
And having made contact with Tesco, McCarthy said the multiple ultimately came back with an offer the T&S board could not refuse. "We never had the strength or authority in chilled and fresh such as chilled ready meals, bread and vegetables," said McCarthy.
"We felt unless we got a partner, we would go on trying to achieve this for many years."
T&S started exploring selling other retailers' brands through its chillers almost two years ago, tying up with Iceland to sell Iceland branded products in a four-store trial. But the partnership fizzled out and the chain tried to work with its supply base to improve its offer without a partner.
Tesco will be able to offer substantial improvements to the company's range, said McCarthy. "This is a win-win-win situation for customers, shareholders and employees.
"Tesco will bring more choice and value to customers, benefits to shareholders and opportunities to employees."
His comments follow reports bosses at M&S and Safeway had both looked at One Stop.
McCarthy's own future with the chain remains unclear.
"It is intended that I remain involved in the transition," he explained. "But this will not be clarified until the final offer document is drawn up by Tesco."
Broker Schroder Salomon Smith Barney said Tesco might be able to improve T&S's buying terms by 5-6%, with more margin improvements coming through a stronger fresh and chilled own label offer. And sales could grow from £709m to £810m by 2004.

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