C-store chief warns of tough times ahead

THE Association of Convenience Stores ? whose members include the Co-operative Group, United Co-operatives and Plymouth & South West Co-op ? has called on the Government to block...

THE Association of Convenience Stores ? whose members include the Co-operative Group, United Co-operatives and Plymouth & South West Co-op ? has called on the Government to block Tesco&#039s &#163 54 million purchase of 45 c-stores in central London.
ACS Chief Executive David Rae says the proposed acquisition of Cullens, Europa Foods and Harts stores from private company Adminstore, coupled with the multiple&#039s plans to quadruple its Tesco Express c-store portfolio to 1,000 outlets represents a serious threat to other c-store operators in 2004 ? particularly the smaller groups.
Said Mr Rae: "The Office of Fair Trading has to consider this latest acquisition in the context of Tesco&#039s 26 per cent share of the UK grocery market and refer the takeover for full investigation by the Competition Commission.
"It is no longer acceptable for the competition authorities to ignore the impact of the supermarket giant&#039s encroachment into the neighbourhood shopping sector and the implications are serious for the long-term sustainability of the industry."
Added Mr Rae: "It is vital that the Office of Fair Trading, which is undertaking a review of the supermarket code of practice, recommend measures that will promote fair competition between retailers and choice for consumers. This can only be done by the introduction of safeguards, namely a ban on predatory below cost selling and transparency of buying prices targeted at supermarket giants.
"The supermarkets&#039 interest in the sector reflects the growth and potential available in neighbourhood retailing and to meet the challenge our members must focus on the strengths of the format, most importantly availability and a quick, efficient service."
In view of the Government&#039s approval of Tesco&#039s acquisition of 1,100 T&S c-stores a year ago, a spokesman said the company was "reasonably confident" of completing the Adminstore deal this time.
However Tesco are not thought to be among the groups interested in the 2,000-strong Londis chain. Trade press speculation continues to link the Co-operative Group among those who are believed to have met advisers KPMG for further details on the business with the accountancy firm expected to offer recommendations to Londis shareholders by the end of next month.
The Co-op Group last week announced record food sales for the final quarter of the year, helped by a like for like sales growth of 2.6 per cent in its convenience stores over the period December 1st to January 3rd.
Chief Operating Officer, Retail, Malcolm Hepworth commented: "Overall, our performance as a top-up retailer was creditable with our like for like results sitting in the middle of the multiple pack."

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