Food groups Morrisons and the Co-op are expected to be at the forefront of acquisition interest in organic food home delivery specialist Abel & Cole, which is being put up for sale.
Morrisons, the fourth biggest grocer, is likely to cast its slide rule over Abel & Cole because at present it has no online offer unlike rivals Asda, Sainsbury’s and Tesco.
New chief executive Dalton Philips is keen to rectify that, but has not yet decided whether to buy a business or build one from scratch.
Although Morrisons is understood to have looked at Abel & Cole in the past, a source at the big grocer downplayed speculation that it would be at the front of the queue when a formal sale process gets under way.
But other sources familiar with developments said there is clear logic in a tie-up because of Abel & Cole’s infrastructure, product opportunity resulting from Morrisons’ ownership of farms and the chance to tap into a Waitrose-style customer base. “The expectation is that they’ll talk,” a source said.
Co-op, the fifth biggest food group following the acquisition of Somerfield, also has no online food operation and is likely to find Abel & Cole’s ethical stance and focus on food provenance attractive.
Abel & Cole, which operates from Manchester southwards, is understood to have generated a 25% sales uplift over Christmas. Last year the retailer made a profit of £4.2m. PwC has been appointed to handle a sale. Morrisons and Co-op declined to comment.
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