Provisional green light for Tesco takeover of Booker

TESCO’S £3.7 billion takeover of wholesale group Booker has been given the provisional green light after the competition watchdog said it would not lead to higher prices or hit service for shoppers.

The Competition and Markets Authority (CMA) said its in-depth investigation into the tie-up found it did not raise competition concerns despite fears raised by a raft of rival wholesalers.

The CMA said Tesco and Booker do not compete “head-to-head” in most areas in which they operate, in particular the catering sector, where Booker makes more than 30 per cent of its sales.

Shares in Tesco rose six per cent on the announcement, while Booker also leapt six per cent higher in the FTSE-250.

The CMA’s provisional all-clear comes as a surprise, following earlier findings that raised fears over 350 local areas of overlap between Tesco and Booker where it feared the deal could lead to “worse terms”.

Retail analyst Bruno Monteyne at Bernstein said the tie-up would make

Tesco “not only the biggest grocer in the UK but also one of the fastest growing food retailers in the UK for many years to come”.

But he said the focus will now shift on to whether investors will approve the takeover, with 75 per cent of Booker shareholders required to vote in favour. THE value of Scottish retail sales last month was down on a year earlier, as the steepest drop in the non-food category since 2012 outweighed an inflation-fuelled rise in the grocery sector, industry figures reveal.

The survey, published today by the Scottish Retail Consortium (SRC), highlights the pressure on households as they deal with a renewed fall in real pay caused by a surge in inflation resulting from sterling’s post-Brexit vote tumble.

Official figures published yesterday showed annual UK consumer prices index inflation remained stuck at a five-year high of three per cent in October, way above the two per cent target set for the Bank of England by the Treasury. The data highlighted upward pressure on food prices, with sterling’s weakness having raised the cost of imports.

Annual UK CPI inflation was just 0.3 per cent in May last year, ahead of the Brexit vote.

The SRC survey shows the value of Scottish retail sales in October was down by 0.8 per cent on the same month of last year.

The value of non-food sales, the category that reflects more discretionary consumer spending, was in October down by 5.2 per cent on the same month of last year.

The SRC noted this was the worst year-on-year fall in the value of non-food sales since January 2012.

And it flagged weakness in the clothing and electrical categories.

Driven by inflation, the value of food sales in Scotland last month was up by 4.9 per cent on October 2016.

Figures published by the British Retail Consortium earlier this month showed the value of retail sales in the UK as a whole last month was up 0.2 per cent on October 2016. This represented a dramatic slowdown in year-on-year growth in UK retail sales value from 2.3 per cent in September, against the difficult consumer backdrop.

The SRC has highlighted the boost to overall UK retail sales in recent years from a stronger economic and housing market performance in London and southeast England.

Ewan MacDonald-Russell, head of policy and external affairs at the SRC, said of the latest Scottish numbers: “Hallowe’en wasn’t enough to stave off hard times on the high street for non-food retailers, who suffered the most challenging month’s performance in [more than] five years. Overall, even continued strong food sales weren’t enough to rescue October’s figures.

“The gap between grocery and non-food sales continues to grow. Food sales are still relatively strong, although still partially being driven by inflation. However, on the high street there will be less optimism, with clothing and electrical lines struggling in October.”

He declared this month would be crucial for high street retailers, “with promotions around Black Friday likely to be integral to sales

High street is under pressure amid falling real pay caused by a Brexit votefuelled inflation surge.

success for some in the crucial Christmas shopping period”.

He added: “Those retailers will face a tough act balancing giving customers the best deals to stimulate sales whilst not forfeiting margins already eroded by higher costs.”

Craig Cavin, head of retail in Scotland for accountancy firm KPMG, said: “Retailers will be disappointed with October’s figures showing a 5.2 per cent decline in non-food sales and marking the largest fall since 2012. Unseasonably mild weather, coupled with Black Friday looming and limited promotional activity in October, meant retailers failed to persuade customers to open their wallets.” DRINKS giant Diageo has said an inability to attract women into manufacturing roles that require shift working is largely to blame for a 16.7 per cent gender pay gap in its Scottish operations.

The figure, which compares the median salary paid to all male employees with the equivalent for all female staff, compares favourably with the 18.8 per cent gap the Office for National Statistics says exists in the UK as a whole.

However, in the rest of the UK the median female earner at Diageo earns 9.8 per cent more than the median male.

The reason for the disparity, according to the company’s Gender Pay Gap Report, is that Diageo’s Scottish business focuses mainly on manufacturing while in England the firm employs a large number of women in office-based roles at its London headquarters.

The report said the Scottish pay gap was being driven by “a larger number of manufacturing roles, which traditionally struggle to attract women, in part due to unsociable shift patterns”.

“These roles can attract higher levels of shift allowance and are more likely to be staffed by men,” the report said.

In England, meanwhile, the company’s pay gap favours women because “there is a higher proportion of men in more junior field sales and manufacturing roles, and a higher proportion of women in our office based functional roles”.

Under the terms of the Equality Act all businesses with 250 or more employees are required to publish their gender pay gap statistics. The data measures the gap across all roles rather than comparing what men and women are paid for jobs of equal value.