Conviviality To Acquire P&H-Owned Stores In £25 Million Deal
UK wholesaler and distributor Conviviality has agreed to buy more than 100 convenience stores from troubled wholesale company Palmer & Harvey, according to The Telegraph.
P&H collapsed into administration last month, putting 2,500 jobs at risk in the weeks before Christmas. However, it is now reported that Conviviality has agreed to buy 109 stores out of administration, as well as the franchise rights for a further 18 stores trading under the Central Convenience brand, in a £25 million deal.
The deal is set to strengthen Conviviality’s presence in the south and south-west of England.
The company, which operates brands such as Bargain Booze and Wine Rack, posted revenue of £836 million in the first half of its financial year, representing growth of 9.2%, compared to the same period in 2016.
There have been a number of significant changes in the UK’s wholesale industry in recent months.
P&H, which supplies around 90,000 supermarkets and convenience stores across the country, has been hit by ‘challenging trading conditions’ in recent months, and efforts to restructure the business have been unsuccessful. Meanwhile, rival wholesaler and convenience retailer Booker is set to be taken over by supermarket giant Tesco, after the deal was provisionally cleared by the UK’s Competition and Markets Authority (CMA) last month.
However, a number of UK wholesale companies have expressed concern over the £3.7 billion merger, saying that the increased buying power would make it very challenging for other wholesalers to compete. There was also a concern that once the companies had merged, Tesco/Booker would become the ‘preferential customer for suppliers’, meaning that it would have preferential access to seasonal or limited stock.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.