Booker Group, Britain's biggest cash-and-carry wholesaler, has agreed to buy the Londis and Budgens chains to expand its network of grocery and convenience stores and tap into changing consumer habits.
The deal will see Booker pay £40 million to buy the two chains from privately owned Irish food wholesaler Musgrave Group.
The company's shares rose more than 10 per cent in early trading, making them the top gainer on London's FTSE-250 Midcap Index.
Consumers are shopping around for the best prices, buying little and often and increasingly opting for convenience stores or online shopping, rather than large out-of-town sites.
The acquisition will help Booker, which already owns the Premier and Family Shopper brands, to compete with the country's four big supermarkets as they expand their own local convenience store networks amid an industry price war.
"Overall it will help independent retailers prosper," Booker chief executive Charles Wilson said.
Booker, which also reported a 17 per cent rise in full-year operating profit, said the increased scale and operational efficiency should help lower prices.
The company said it expected the acquisition to be neutral to earnings in the first year before adding to its earnings thereafter.
Founded in 1872, Budgens is a franchised chain of grocery stores and one of Britain's oldest supermarket brands. It became part of the Musgrave Group in 2002.
Budgens has 167 stores, including neighbourhood supermarkets, and had sales of £329 million in 2014.
Londis was set up in 1959 by a group of independent retail grocers. It now comprises 1,630 convenience stores with sales of £504 million in 2014.
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