Booker kept first-half profit essentially flat at £163m despite a 2.6% annual like-for-like sales decline to £4.6bn, with the Tesco-owned wholesaler crediting a "better buying" strategy for protecting margins as tobacco volumes collapsed.

The figures, disclosed in Tesco's H1 2026/27 interim results, show the strain across every Booker division. Like-for-like retail sales fell 0.6% to £1.7bn. The catering arm — Booker's worst-affected business — dropped 3.2% to £1.4bn. Management blamed the decline on falling tobacco sales, the structural headwind that now defines the UK wholesale channel's top line.

Strip tobacco out, and the picture changes: core retail sales grew 1.4% in the period. That gap between the reported and ex-tobacco numbers is the clearest measure of how much the cigarette decline is masking underlying momentum in the depot network.

What is 'better buying' actually worth?

The company said better buying offset further sales decline, but disclosed no figure for the savings. Two executives framed the mechanics on a media call.

"We've worked really hard this summer to drive our retail sales, and we've invested very heavily behind value and particularly promotional campaigns to be very competitive in the retail market," Tesco chief executive Ken Murphy said. "Booker Retail performance kind of reflects that."

Chief financial officer Imran Nawaz pointed to procurement and overhead leverage: "There are also savings initiatives that we have internally, where we buy stuff at a hopefully cheaper price, so that we can pass on those savings to our customers." He added that further investment in head office operations had helped Booker pass savings through to independent retailers.

For symbol and independent customers, the implication is direct: buying scale is being converted into promotional pricing rather than retained as margin, a defensive play to hold share against other delivered and cash-and-carry wholesalers.

Where is the growth coming from?

Booker added a net 275 stores in the first half. Network expansion, not like-for-like growth, is doing the heavy lifting on total volume — a familiar pattern in UK wholesale, where the fight for fascia share among independents decides depot throughput.

The results also disclosed a merchandising and media build-out:

• 7,500 digital screens displaying supplier promotions and deals across the group, including Booker and One Stop stores;
• More than 5,000 screens installed across 100 Booker locations nationwide;
• The project delivered with Pixel Inspiration and Dunnhumby, Tesco's data analytics arm.

The screens turn Booker's estate into a retail media inventory play. Supplier-funded promotions at point of purchase add a higher-margin revenue stream that does not depend on product gross margin — though Tesco disclosed no revenue or take-up figures for the network, so the commercial contribution remains asserted rather than measured.

Does home and clothing signal a Majestic move?

Sky News recently reported Tesco was one of several candidates to buy alcohol retailer Majestic Wines. Murphy and Nawaz declined to comment on the report, but Murphy was explicit that Tesco wants to expand beyond food.

"We believe that there's an opportunity to extend our usefulness to our customer base through other missions and we've kind of led that charge through our home and clothing business," Murphy said. "We are building that out progressively and we also see a role for Booker in that because it has a huge reach into independent retail and into our food service partners."

He drew the line at speculation: "On any kind of rumours that might be in the market, all I can tell you is that we are committed to food. Food is where we want to have at the very heart of our business."

The signal for distributors is that Booker's depot network and catering customer base may become a route to market for non-food general merchandise — a category independents have historically bought from alternative wholesalers. No timelines, ranges or supplier arrangements were disclosed.

What happens next?

Booker enters the second half with flat profit, a shrinking tobacco base, positive ex-tobacco growth and a store network still expanding. Murphy indicated the home and clothing build-out will continue "progressively," with Booker positioned as the independent-retail delivery channel for it.