If a week is a long time in politics then the last seven days have been an eternity in grocery retail. And, appropriately for this time of year, the industry has been shaken up with a bang. But instead of the old institution of Parliament being the target, the explosion is in the industry's latest hotspot, the convenience market, at the hands of If a week is a long time in politics then the last seven days have been an eternity in grocery retail. And, appropriately for this time of year, the indusry has been shaken up with a bang. But instead of the old institution of Parliament being the target, the explosion is in the industry's latest hotspot, the convenience market, at the hands of two of the UK's largest retail institutions.
On Monday, in a not so unexpected move, the Co-operative Group pulled off the type of deal it has been seeking for some time, the acquisition of Alldays. With pockets £131m lighter, the group's retail boss Malcolm Hepworth basked in the glory of being able to say we've done it' in relation to its strategy of becoming number one in top-up. But come Wednesday, the wind had been blown out of Hepworth's sails. In a move which shocked the industry and surprised the City, Tesco said it was to buy T&S Stores, giving it a near 5% value share of the £20bn convenience market.
In acquiring T&S, Tesco will gain one of the most efficient businesses in the convenience sector, though perhaps with fewer immediate easy wins than the Co-operative Group will get through revamping the beleaguered Alldays estate.
Where Tesco will win is in gaining distribution expertise in convenience by piggybacking on T&S's systems. It can also bring its buying power to a proven neighbourhood distribution network, something with which its rivals  Sainsbury chief among them - will struggle to compete.
But it won't all be plain sailing. Neighbourhood retailing brings its own challenges, notably crime and staffing, and it will be interesting to see how Tesco deals with these.
However convenience is the new battleground for the multiples, and Safeway was among those known to be sniffing around T&S and Alldays. And, things do have a curious habit of coming in threes.
Unfortunately for Safeway, it looks increasingly likely that it will be the one fizzling out rather than the one creating the big bang.
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On Monday, in a not so unexpected move, the Co-operative Group pulled off the type of deal it has been seeking for some time, the acquisition of Alldays. With pockets £131m lighter, the group's retail boss Malcolm Hepworth basked in the glory of being able to say we've done it' in relation to its strategy of becoming number one in top-up. But come Wednesday, the wind had been blown out of Hepworth's sails. In a move which shocked the industry and surprised the City, Tesco said it was to buy T&S Stores, giving it a near 5% value share of the £20bn convenience market.
In acquiring T&S, Tesco will gain one of the most efficient businesses in the convenience sector, though perhaps with fewer immediate easy wins than the Co-operative Group will get through revamping the beleaguered Alldays estate.
Where Tesco will win is in gaining distribution expertise in convenience by piggybacking on T&S's systems. It can also bring its buying power to a proven neighbourhood distribution network, something with which its rivals  Sainsbury chief among them - will struggle to compete.
But it won't all be plain sailing. Neighbourhood retailing brings its own challenges, notably crime and staffing, and it will be interesting to see how Tesco deals with these.
However convenience is the new battleground for the multiples, and Safeway was among those known to be sniffing around T&S and Alldays. And, things do have a curious habit of coming in threes.
Unfortunately for Safeway, it looks increasingly likely that it will be the one fizzling out rather than the one creating the big bang.
{{COMMENT & LETTERS }}
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