Booker resilient to food retail woe, but analysts disappointed

Food wholesaler Booker continues to remain resilient to the struggles facing the wider food retail sector after delivering a solid increase in underlying sales in its third quarter.

However, the Makro chain which Booker took over in 2013 weighed on overall top-line growth, while core growth at the company missed analysts’ expectations.

Booker said group sales increased by 1.4% in the 16 weeks to 2 January.

Excluding Makro, like-for-like (LFL) sales were 2.5% higher than last year, a small improvement on the 2.4% growth registered in the first half.

However, non-tobacco LFL sales increased by 2.6% in the third quarter, well below Shore Capital’s estimate of a 3.5% increase.

The company said that Makro turnaround is “on track”, though non-tobacco LFL sales were down 6.5% in the 16-week period as the company continues to exit “non-profitable, non-professional categories”.

Meanwhile, the cash-and-carry division Booker Wholesale performed well with rising customer numbers and sales in line with expectations. Booker Direct, Chef Direct and Ritter were also on track, it said.

"This was a good quarter, with Booker Group continuing to make progress in a challenging market,” said chief executive Charles Wilson.

“We continue to improve the choice, prices and service to catering, retailing and small business customers in the UK."

The stock was down 1.2% at 160.7p by 08:15 on Thursday.