Retail news round-up on August 6, 2014: Walgreens to acquire Alliance Boots, Shop prices drop, Tesco’s share in Irish grocery market fell.
Walgreens to acquire full control of Alliance Boots for £5bn
US pharmacy retailer Walgreens will buy Swiss retailer Alliance Boots in a £5bn deal, the Telegraph reported. The chemist chain will acquire the remaining 55% of the equity it does not already own. The combination of Alliance Boots and Walgreens will give the US retailer some 11,000 stores in 12 countries, and the largest pharmaceutical wholesale and distribution network in the world. The announcement is likely to be made as soon as today and will allow preparatory work to begin, with the deal actually being enacted early next year. The sale’s confirmation will mean a further pay day for the man who created Alliance Boots, Stefano Pessina, and KKR. Meanwhile, Walgreens has ruled out moving its headquarters from the US for tax purposes.
Shop prices drop 1.9% in July
According to the British Retail Consortium (BRC), UK retail shop prices dropped 1.9% year-on-year in July at the fastest rate since records started in December 2006. The BRC said food prices increased just 0.3%, while prices for furniture, electrical goods and gardening tools decreased at a faster rate last month.
“Against a backdrop of stable commodity markets, the stronger sterling making imports cheaper and wavering retail spending, current levels of deflation are expected to continue,” said BRC’s director general
Tesco’s share in Irish grocery market fell to 25.6%
According to the Kantar World Panel’s new supermarket share figures, Supervalu’s share in the grocery market in Ireland stands at 24.7% for the 12 weeks up to July 20. Tesco’s market share dropped to 25.6% now from 27.5% this time last year. Dunnes Stores is performing strongly with a sales rise of 2.6%, a jump which has seen its market share climb 0.3 points to 21.2%. Lidl’s share of the sector is at 8.4%, while Aldi’s is marginally behind on 8.3%. Lidl’s sales grew by 11.1%, while Aldi’s jumped to an impressive 17.1%.