Booker looks for supply chain efficiencies from Makro takeover

LinkedIn +

Wholesale group Booker expects to find supply chain efficiencies from its takeover of  Makro, the UK subsidiary of German group Metro.

Makro has 30 sites in the UK and its customer base is largely made up of SMEs. However, it has underperformed in recent years and made a pre-tax loss of £63.2m last year.

Booker is paying Metro £15.8m in cash and Metro will also take a 9.99 per cent stake in Booker. It expects the acquisition to be earnings-enhancing in the first year.

Booker believes the acquisition  will provide a growing route to market for suppliers, with low financial risk. Supply chain efficiency should improve and carbon emissions should be reduced. 

“The enlarged group will be able to sell a wider range of products to SME customers. At a time when multiple retailers are increasingly targeting SME customers, the combination of Makro UK and Booker should provide suppliers with a high service route to market.”

A typical Booker branch carries 8,500 SKUs, while a typical Makro UK branch sells 29,000 SKUs.

Booker intends to make part of Makro UK’s product ranges available throughout the UK, either in its branches or via the internet.

It also reckons it can improve the delivery service for customers by utilising Booker’s and Makro UK’s sites. It expects to improve availability for customers through pooling of stock.

* Booker has just reported a 17 per cent rise in operating profit  £89.6m for 2011-12, on sales up 9.4 per cent to £3.9bn.

Booker Direct, the delivered wholesale business led by Mark Aylwin, has seen sales almost double since 2008 to more than £1bn.

In 2010 it acquired Ritter-Courivaud, the speciality food supplier to restaurants.  “Through combining the logistics expertise we have in Booker Direct, with the catering knowledge from Ritter and the Groups’ buying scale, we are now launching Chef Direct.  Chef Direct will be based in Didcot and will become ‘the new force in foodservice’,” it said.


Share this story: