William Low

William Low & Co plc, popularly referred to as Willie Low's and latterly marketed as Wm Low,[2][3] was a chain of supermarkets headquartered in Dundee, Scotland. Initially founded in 1868, Low's had branches throughout Scotland, North East England, Cumbria and Yorkshire. As a group, it was smaller than most of its competitors and often served small towns, although it still had several large hypermarkets.[4] The company used to trade on its Scottishness as a unique selling point in Scotland. At one stage, the company also ran a chain of frozen food stores known as Lowfreeze.[5] Lowfreeze was sold in 1987 to Bejam.

The remaining business was purchased by Tesco for £257M in 1994. Tesco had to compete with rival competitor Sainsbury's

Early years

James Low, who was born near Kirriemuir in 1849, completed a grocery apprenticeship in Kirriemuir before moving to Dundee in 1866. Two years later, with a £300 loan from Clydesdale Bank, he opened his own grocery store at 19 Hunter Street. By 1870, he was listed in the Dundee Directory as a grocery, tea and wine merchant at 11–13 Hunter Street. At this point, James's younger brother, William, joined the business at the age of 12.[7] A year later, James Low and William Lindsay, a local preserve, confectionery and bakery manufacturing business owner, formed a partnership, Low & Lindsay, and by 1874 they had a further branch at 304 Perth Road and had moved into wholesaling. In 1879, William Low bought the business and it was renamed William Low & Co. By 1881, the Dundee Directory listed the business as wholesale grocers and wine merchants,[7] and the business had seven branches across Dundee.[8] In 1884, the company opened a warehouse and headquarters at Blackness Road.[8]

In 1885, William Rettie joined Low in partnership. Rettie was described in the 1877 Dundee Directory as a grocery and tea dealer, with stores in Rosebank Street and Dudhope Street. Rettie had married Low's sister, Annie, in 1884.[8][9] The Dundee Directory of 1885 had listed that the company had eight stores.[10] In 1888, the company opened a wholesale department in Glasgow which facilitated the opening of six stores in the city by 1895, and the expansion of the business to 46 stores across different towns, including Crieff, Inverness and Stirling.[8] The company further expanded two years later when they purchased Farrquar and Farrell, an Edinburgh-based tea and provision merchant, for £5,000. The company continued to expand, and by the turn of the century, the business had 64 stores spread between Hawick in the south to Dingwall in the Highlands.[8] In 1917, the company became a private limited company, with William Low as chairman.[11] The business not only had grocery stores, but their own bakery, bottling factory and butchery departments producing goods.[12] William Rettie died in 1922, and was replaced as managing director by his son, Archibald, while William Low died in 1936, a year after his only son. At the start of World War II, Low's had 84 branches. It was one of the larger grocery multiples, but still far smaller than the giant of Home and Colonial Stores.[13]

Modernisation and growth

The company continued to grow its supermarket portfolio, and by 1972 it had grown to 31, with ten self-service stores, an increase of floorspace of 25%. James Millar stated that none of their stores were older than fifteen years.[24] This was further accentuated with the opening of a new head office and distribution centre, at Dryburgh Industrial Estate in Dundee in October 1972, which incorporated modern data processing and warehousing methods.[25][26] The company became a public limited company in 1973, launching on to the London Stock Exchange. In 1975, the company launched the first Scottish freezer chain with the opening of the first Lowfreeze store in Glenrothes.[27] The company opened its largest supermarket to date in 1976, with a brand new store in Irvine.[28] This was followed by the 1978 opening of the company's first superstore, in Perth, at the cost of £1.5 million.[24] The company moved into the low end of the market in 1976, when they launched their Discount Price Policy, which was a year earlier than Tesco's own Operation Checkout.[29] By 1980, the average size of the stores had doubled since 1972, with the company having 46 supermarkets and thirteen Lowfreeze stores.[24] Lowfreeze by this point were generating over £5 million of the company's £74 million turnover (compared to a £9 million turnover in 1970), but the company's profit margins had fallen from 4.1% in 1970 to 2.4% by 1980.[30][31] Low's continued to grow in the 1980s, included replacing stores, such as in Kirkcaldy, where a new superstore was opened in 1981. That outlet not only sold food but also sold non-grocery products, such as bedding, and had a 125-seater restaurant.[32][33] Further developments included the new 10,000 sqft store at the junction of Queensferry Road and Kings Road in Rosyth, a 20,000 sqft store in Baltic Chambers, Grangemouth and further new stores in Wishaw, Oban and Linlithgow which opened in 1982.[34] Low's moved into the fast-food business in 1981, with the opening of McTatties, with restaurants opening in Glasgow and Edinburgh; however, this was unsuccessful and closed just a year later at a write down of £775,000.[35] During 1982, it was reported that Hintons, another supermarket chain, were planning a takeover of Low's, and the current market valuation was £12 million.[36] Wm Low also rose to be included as number 400 in The Times 1000, a list of top UK companies, in 1984, whereas in 1976 it was not even listed.[37]

In 1984, Wm Low attempted but failed to take over Hintons, which later became part of Argyll Group.[5] By 1984, the company had reduced the number of stores, with WM Low's having 45 and Lowfreeze having dropped from a high of 17 to 16; however, the average size of their stores had grown from 6,000 sqft in 1980 to 11,000 sqft, and turnover had grown to £150 million by 1984. The company had now an estimated 10% of the Scottish grocery market and had seen profit margins rise to 3.5%.[38] In 1985, Wm Low took over Laws Stores at a cost of £6.8 million.[39][40] Laws had a group predominantly based in the north-east of England with a portfolio of smaller stores than Wm Low. James Millar said of the deal: "We are no longer confined to Scotland's 5 million population as our market - we have broken out of that restriction to an almost limitless growth potential for the future.[41]" Laws was not the only acquisition that Low's tried to complete in 1985, with discussions held with Hillards that went no further.[41]

During 1988, Ian Stewart, the final family member on the board, retired.[43] In April 1989, Wm Low attempted a friendly take over of Budgens, a small supermarket chain based mainly in the South East of England. The bid was withdrawn in May, after it was discovered that Budgens' loan commitments were greater than had previously been reported.[44][45][41] The pulling out of the takeover had cost Low's £2.5 million as a result of fees and having to pay for underwriting commitments which were no longer required. The company opened new stores in Dumfries and Northallerton.[46] In the 1988–89 trading year, Low's turnover exceeded £300 million for the first time, and the company's profit margin had increased to 5.8%.[47][48]

In 1990, Low's were in discussion with Isosceles, owners of Gateway Supermarkets, to purchase 81 stores for £212 million, with some to be sold off to the Co-operative Wholesale Society to help fund the move, but this fell through as Low's did not want to take on Gateway's smaller outdated stores.[49][41] The company floated a rights issue in December 1990 which raised £37.2 million. £12 million of this was used to develop a new multi-temperate distribution centre in Livingston and updating the company's computer systems.[50] In 1991, the company made a pre-tax profit of £23.6 million, but in 1992 they had fallen to £19 million, even though the company had invested in five news stores, including Milngavie and Whitehaven, which had added a further 100,000 sqft of retailing space to the company.[51][52] The company chairman told shareholders: "We are trading in very difficult conditions, in which the company, faced significant new competition in the new year from mainstream multiples and discounters.[50]

Expansion into the north and midlands of England was a priority, with the £12 million, 30000 sqft Loughborough store opening in 1993. The company announced that this was the furthest south that the business would grow to, as it was at the limit of the company's distribution network.[53] The business also opened new stores in Montrose, Tayside, Ilkeston, Campbeltown, Dundee and completed an extension to the Linlithgow store;[54] however, during the year, the company started discussions with Safeway about a store swap, with Low's trading some of their bigger stores for Safeway's smaller units in more preferential geographical areas, but nothing came of it.[55] The stockbroker Hoare Govett stated in their April 1994 circular they saw Low's as neither a genuine superstore operator nor a genuine discounter.[55]

The Scottish Business Insider quoted that Low's yearly performance figures for the 1990s were:

Staff numbers at Low's, prior to the takeover, had been reasonably static: from 8,799 employees in 1991 to 8,981 in 1994.[56]

1991: £354 million turnover, £21 million profit

1992: £394 million turnover, £23 million profit

1993: £253 million turnover, £20 million profit

1994: £446 million turnover, £21 million profit

Takeover by Tesco

The takeover battle for William Low started on 14 July 1994, when Tesco announced its formal bid of £154 million for the company to dramatically improve its Scottish portfolio and an assurance it would not cherry pick the best stores.[57] Two weeks later, J Sainsbury launched a counter-bid of £210 million, with chairman David Sainsbury stating: "Sainsbury was in the strongest position to unlock the potential of Low's stores. 'Our offer provides a fair price to Wm Low's investors and if accepted will provide a good return on investment to our shareholders.[58]" Sainsbury was keen to gain a stronger foothold in Scotland, having only three stores in Scotland at the time of the bid.[59] Tesco, at the time, had 7.1% of the Scottish grocery market, while Sainsbury's had 4.9%, against Low's 6.6%.[58] Analysis at the time predicted that the cost, although fourteen times what Low's earnings were, would be the same as building 25 new stores.[57] Analysts reported that Sainsbury's were interested in Low's seventeen larger stores and its distribution centres, with Sainsbury's suggesting they had received bids for some of the smaller stores.[60]

The Argyll Group, owners of Safeway and Scotland's biggest grocery retailer, announced in July 1994 that it would not be making a bid for Wm Low.[61] Tesco reacted with an improved offer of £247 million and Sainsbury's withdrew from the battle, with David Sainsbury stating: "The original price Tesco offered for Wm Low made it fairly cheap. At the price Tesco will be paying now, we believe it can't possibly make a decent return.[62]" At the time, Tesco products were, on average, 9% cheaper than Low's, with analysts predicting that Tesco could lift the company's profits by £15 million;[63] however, Tesco also had to take on Low's debt, which stood at £77 million.[64] Tesco formally took over Wm Low on 2 September 1994 for a total sum of £257 million, ending 126 years of business.[65] The purchase of Wm Low doubled Tesco's Scottish market share from 7.6% to 15.3% in 1995.[66]

Tesco closed the Dundee headquarters of Wm Low, with the loss of 300 jobs, opening a smaller Tesco Scottish office to deal with local suppliers that employed twenty people.[68] A re-fit programme followed, and Tesco scanning tills were installed at every store by August 1995, with the refit being completed by the end of 1996 at a cost of £35 million.[69] At the time of the Tesco takeover, a number of new Wm Low Stores were earmarked for development. These were ultimately launched as Tescos but had been planned by Wm Low. This included Aviemore,[70] Cupar, Falkirk and Dunblane, opened between 1995 and 1996.[71]

The distribution centre at the Dryburgh Estate in Dundee became the Tesco customer-service centre and one of two Scottish distribution depots for Tesco. In 2006, Tesco announced the closure of the Dundee depot to create a new centre in Livingston, on the site of the former NEC factory, which would also replace the current distribution centre already based in Livingston (now open as of October 2007).[72] The adjacent customer-service centre was unaffected by the closure. The warehouse at Dundee was demolished in 2019.[73]

Prior to the takeover, sales had been falling at a rate of 6%, a figure that Tesco reversed to a growth of 25% at the end of 1994–95 in the former Low's stores.[5]

fate	Taken over by Tesco
successor	Tesco
foundation	1868
founder	James Low William Low William Rettie
defunct	2 September 1994
location	Dundee, Scotland, UK
industry	Retail
products	Groceries
key people	Philip Rettie Ian Stewart James Millar‡R1R‡
num employees	8,981
subsid	Lowfreeze McTatties

Early years

After World War II

Modernisation and growth

Takeover by Tesco

1964 Aberdeen typhoid outbreak

References and footnotes

External links

References