£3.9bn Booker merger to spark Tesco data bonanza

Tesco data bosses will be licking their lips at the prospect of the £3.9bn merger with wholesale giant Booker – announced late last week – as it will potentially give the firm’s data strategy the biggest single injection of insight since it launched Clubcard over 20 years ago.
A key part of the Booker deal, which is likely to face scrutiny from competition regulators, is that a raft of well known convenience store brands operate under franchise agreements with the company.
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.
While Tesco has so far kept “Chinese walls” between its Clubcard loyalty scheme – run by DunnHumby – and One Stop’s programme – which is run by Eagle Eye – the data from both is still all funnelled into the Tesco database and is also offered to a raft of marketing partners.
No wonder the likes of Coca-Cola and Procter & Gamble have said they back the deal, along with smaller suppliers including pasty owner Samworth Brothers and meat processor Hilton Food Group.
And, even though Booker’s franchises do not yet run loyalty programmes, for Tesco’s 50-strong data team, the chance to get their hands on an extra layer of supply data through Booker’s businesses could be irresistible.
After all, Tesco’s entire operation is fuelled by data insight, from stock control and customer targeting to shelf placements and even factors such as instore heating. In 2013, the supermarket achieved savings of £100m a year in its supply chain costs by implementing a major data analytics programme, which overhauled its stock control and delivery strategies.
The retail giant used Matlab modelling tools from MathWorks to simulate performance of its distribution depots based on four years of sales data held in a data warehouse.
Not that it is a done deal yet. Tesco and Booker’s rivals, which include Spar, Nisa and Costcutter, are said to be planning a “co-ordinated attack” against the deal, according to sources, and will lobby the regulator to push for concessions.