Britain’s convenience store battle

In the food business, "convenience stores are one of only two sources of growth", says Matthew Vincent in the Financial Times' Lombard column; the other being online growth (see above). While supermarket sales fell by nearly 2% last year, convenience-store revenue rose by 6%. Which is why Sainsbury's has bid £130m to buy Nisa, the mutually owned consortium of more than 1,300 independent retailers, which operates 3,000 small shops. Sainsbury's is understood to have beaten off rival bids from both the Co-op and Morrisons.

The deal is part of the "supermarket arms race" raging across the UK, says Alys Key in City AM. It follows Tesco's £3.7bn acquisition of Booker earlier this year, which "set a cat among the pigeons" in the sector, say Zoe Wood and Sarah Butler in The Guardian. Most of the UK's 41,000 convenience stores are independently owned, or are part of groups such as Nisa or Costcutter. Consolidating them into larger chains may deliver supply chain and pricing benefits and high earnings, says Vincent

Still, Nisa's mutual structure means at least half of members must approve the buyout, so there may be a battle ahead to get the deal done. "The Co-op would have been a better fit for its mutual values," one source tells The Guardian. "Sainsbury's is just a PLC trying to do what Tesco has done Nisa has no need to sell itself."

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City talk

The new chairman of miner BHP Billiton is "some bloke from packaging", says Alistair Osborne in The Times: Ken MacKenzie is arriving after a 23-year stretch at Australian box maker Amcor. Who better to "put revolting shareholder Elliott back in its box"? The activist hedge fund has been badgering BHP to reform its business for some time now, and the signs are that MacKenzie is "ready for a productive chinwag" with Elliott and "other BHP shareholders less than gruntled by present performance". By the time he's finished, "BHP may be quite a different package".

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"Here come those dastardly hedge funds, up to their usual tricks," says Nils Pratley in The Guardian. "They're rescuing the Co-operative Bank for a second time" by swapping their high-yielding bonds for shares to recapitalise the bank. They're not doing this "out of the goodness of their hearts, of course". Despite the bank's woes, the brand "hasn't obviously been damaged" and beneath the losses "there lurks a profitable retail bank awaiting the balm of higher interest rates". No wonder the hedgies are staying in. We should be grateful to them "if the Co-op Bank emerges one day" as a challenger bank "capable of standing on its own feet".