Ann: Coles transfers 45 stores to FoodWorks , page-2

I agree with this columnist that this deal is a win-win for Coles and FoodWorks:

BRANDISH
by Rob Lake

Why FoodWorks' Coles buy is a win-win

The announcement that FoodWorks will take over 53 Coles grocery and liquor stores is a win for both.

For Coles it represents an opportunity to concentrate on larger stores that will fit their future model more consistently. The average size of a Coles store rises with this announcement as does the average FoodWorks.

Under John Fletcher, Coles had embarked on an ill advised exercise re-badging Bi-Lo stores as Coles. Doing so killed a viable brand that had a legitimate market niche. It has been widely recognised in the industry as a disastrous move. This latest announcement represents the tidying up of many of the old Bi-Lo stores, moving them to a more appropriate portfolio.

For FoodWorks, it broadens their network with a network of stores of a scale that suits their offer very nicely. The last few years has seen FoodWorks emerge as a vibrant brand that sits comfortably in local communities.

While the deal is subject to ACCC approval, it is difficult to imagine any objection to a move that marginally increases competition.