Spar’s biggest supplier, AF Blakemore, has appointed KPMG to advise on a potential £100m sale of its wholesale business.
The possible sale would contribute to a deal frenzy as big grocers battle to get into food wholesale, the Sunday Telegraph reported.
Bestway, at present the UK’s fifth largest wholesaler with sales of £2.5bn, is thought to be interested in buying AF Blakemore’s wholesale arm.
Bestway managing director Martin Race has previously said that Tesco’s £3.7bn takeover of Booker would be “painful” for the rest of the convenience sector and would lead to more deal-making.
AF Blakemore generated sales of £1.3bn last year but pre-tax profits were only £7.6m, highlighting the low margins of wholesaling. It operates from 13 cash and carry depots.
A sale would allow AF Blakemore to focus on other areas of its business, including retail. It has sought to increase sales through initiatives such as launching Subway concessions in stores.
AF Blakemore and KPMG declined to comment.