The recent acquisitions of Argos, Booker, Holland & Barrett & Whole Foods have come at a very interesting time in UK Retail.
Totaling an estimated £20.6 billion will they be worth it?
It shows the power of bricks & mortar retail is still very much in the psyche of the world’s biggest businesses despite the clamour for E Commerce brilliance & the rise of the discounters.
For Ecommerce, the appeal for consumers in being able to physically see product before they buy is still vitally important in the new age of retail. Also, Amazon has a need to build brand credibility with physical presence, especially to those consumers who do not understand how Amazon works.
Whole Foods is a millennial capturing, bright, vibrant and confidently presented premium C-Store which has a huge range of product appealing to all consumers, with an interesting own label portfolio. The current wellness trend in the market makes this acquisition interesting locally and globally. However H&B and Whole Foods sit at the opposite ends of the scale in consumer demographic and relevance to our high streets by comparison.
Booker & Whole Foods represent the continued rise of C-Stores in our market and the elevated cost of quality products. Diversification is fundamental to keep pace and fight off those pesky Discounters for UK Grocery retail.
The concern is in the Holland & Barrett purchase. They are a retailer devoid of everything the other 3 have. A dark and soulless, boredom inducing 1970’s hovel where your mother bought you fish oil tablets to make you smarter during your exams and lacking anything other than ground zero instore activation. Is this going to be viable with a buyer with little retail operational know how?
The contrast is vast but they are all appealing in their own right. High Street stores need a revamp and where better to do it than with Holland & Barrett, a health and wellness store that stocks everything on deal?
How better to improve the AmazonFresh offering in own label than by utilising Whole Foods?
Argos provide a welcome boost to the JS diversification of their supply chain and category presence.
While the Booker acquisition, well, the dominance of UK food retail and maximising end user offering for Tesco will surely work in the medium term.
We will wait and see how successful each become, however this is certainly not the end of the acquisition it’s the start…an exciting time to be involved in the FMCG food industry.
Which will prove to be the best investment?
The Russian billionaire buying health food chain Holland & Barrett, said he was looking for future stars of the High Street to invest in. Does the protein shake-to-dried fruit store really fit that bill?