Business

What does Booker Group do?

Byron restaurant Image copyright Getty Images
Image caption Byron is one of the restaurant chains Booker supplies

Tesco took the retail world by surprise when it announced it was buying Britain's largest food wholesaler, Booker Group, in a £3.7bn deal.

But what exactly does Booker do and why has the country's largest supermarket snapped it up?

Booker may not be a household name but you may well have eaten in one of the restaurants it supplies or shopped at its stores.

Its sprawling empire includes the UK's largest cash and carry business and a raft of well known convenience brands including Londis and Budgens.

It racked up sales of some £5bn in the year to March 2016.

Wholesale and catering

Booker makes most of its money supplying branded and private-label goods to independent convenience stores, grocers and leisure outlets.

It supplies thousands of product lines - from frozen food to tobacco - and claims more than 1.3 million customers.

The company also supplies catering services for pubs, restaurants and other clients.

Image copyright Getty Images
Image caption Bookers' catering customers include the prison service in England and Wales

Customers include the prison service in England and Wales, restaurant chains such as Byron and Prezzo, and most of the cinema chains in the UK.

Neil Wilson, an analyst at ETX Capital, said Tesco's interest in the wholesale side of the business would have been driven by a desire to merge supply chains and cut costs.

"The UK supermarket scene is in a recovery phase and there are further growth opportunities.

"But it's also hugely competitive and store deflation is hitting margins, meaning anything that can be done to pare back costs in areas like procurement, supply chain, distribution and store footprint is a good thing."

High Street presence

A raft of well known convenience store brands operate under franchise agreements with Booker, buying in its goods and services.

These include more than 3,200 Premier branded stores, 47 discount stores operating under the Family Shopper brand, 1,500 Londis stores, and 120 Budgens shops.

Bruno Monteyne at Bernstein Research said that the quality of these shops was likely to improve through the Tesco deal.

Image copyright Getty Images
Image caption Booker operates more than 1,500 Londis stores under franchise agreements

"Convenience stores are not known for their fresh food, but Tesco is," he told the BBC.

"So I expect Bookers' stores will improve their produce offerings which will be attractive to customers."

Booker also owns Makro, the cash-and-carry brand, with 30 outlets across the UK.

And it has taken its operations into India, where it claims to serve more than 21,000 customers through franchise convenience stores.

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