The current wave of consolidation sweeping the independent sector swallowed another chain this week as United Co-operatives snapped up Leathley’s Quality Fare.
The 19-store, £38m turnover chain is the eighth member of The Grocer Top 50 to be hoovered up since we published our 2004 list in February.
It hikes up the amount of trade lost to privately owned retailers to more than £300m in the period.
Half of the business has gone to the major multiples following the acquisition of Adminstore by Tesco, the acquisition of Bells by Sainsbury and Somerfield’s deal to acquire Aberness.
However, most of the rest has gone to co-ops, as United, Scotmid and the Co-operative Group continue to boost their estates with bolt-on acquisitions.
The Leathley’s purchase is the second major deal for United in a month, coming hot on the heels of the Cheers acquisition (The Grocer, July 24, p6), and takes its food retail estate to more than 500 stores.
And further deals are also in the pipeline, said chief executive Peter Marks, who has just created a new role of head of business acquisitions at the society in order to identify future targets (see p12).
He said:“We are still on the acquisition trail.”
The society still has £50m from the £100m war chest announced in the spring and was currently in discussions with other food retailers about a possible deal, he added.
Plans are still being finalised regarding a conversion programme, but about £5m has been earmarked for refurbishments, which are expected to be completed within 12 months.
Separately, United has also snapped up three forecourt sites from Inner Space Station in York and one site in Sheffield.
Number 31 in The Grocer Top 50, Nisa member Leathley’s operates in the north-east of England from stores ranging from 1,500 sq ft to 13,000 sq ft.
Like United, it was one of the first chains to use voice picking at its warehouse in Colburn.
MD Ian Leathley will leave to concentrate on developing his hardware business House & Home, while his two sons and other senior managers would assist with the integration process, said commercial director Philip Horsfield.
“We’ve had another really good year with sales up 10% on a like-for-like basis.
“However, we were finding it hard to move forward without spending stupid amounts of money. Everyone is looking at this sector now and sites are becoming more expensive and harder to find.”
>>p20 Letters
Elaine Watson