When Charles Wilson left Marks & Spencer to join Booker as chief executive in 2005, many observers’ eyebrows leaped in surprise.

When Charles Wilson left Marks & Spencer to join Booker as chief executive in 2005, eyebrows leaped in surprise. Some observers were flabbergasted that Wilson, dubbed ‘two brains’ for his sharp intellect, should leave the equivalent of retail royalty for what they saw as the grunginess of cash and carry.

But Wilson, who had previously worked at Booker alongside Stuart Rose who he subsequently accompanied to Arcadia as well as M&S, knew what he was doing and has built Booker up since.

Last week Booker beefed up its retail operations with the surprise acquisition – subject to regulatory clearance – of Irish group Musgrave’s UK retail business.

To its existing Premier and Family Shopper chains, Booker will add about 1,800 stores, the bulk of which are Londis symbol stores and the remainder franchised Budgens branches.

Competitive convenience

The deal is a reminder of the ongoing importance of the convenience retail market in which big grocers such as Tesco and Sainsbury’s have carved out strong positions.

If successfully executed, Booker’s expansion is expected by Wilson and his team to improve choice for consumers and “help independent retailers prosper” in a competitive landscape. It would of course too bring benefits to Booker’s supply business.

Wilson’s skills in strengthening Booker, and his wider retail reputation, mean that the big grocers will keep a weather eye on how things progress.

Takeover turnaround

But Booker has a distance to go to bring its newly purchased stores up to speed. Last year, Musgrave’s retail business made an operating loss, before exceptionals, of £7.4m on sales of £833m.

While Musgrave has been sprucing up some shops, the customer experience and range in too many of its branches lags behind that of the supermarket giants’ c-stores and price perception is probably poor too.

The deal means enhanced scale, which should improve prices and choice, and Booker sounded confident when the takeover was unveiled last week.

It is expected to be earnings neutral in the first full year and earnings enhancing from then on.

Alongside the acquisition, Booker issued full-year results which came in a touch ahead of forecasts – the latest evidence of the business’s strength under Wilson’s leadership.

If he can replicate success at an expanded retail division, the convenience market will become even more competitive.