Booker has agreed to purchase Musgrave GB, which includes the Londis and Budgens brands, for £40m. The acquisition is subject to approval by competition and market regulators.
There are 1,630 stores currently trading under the Londis symbol group, with total sales of £504m, with 167 Budgens stores turning over £329m.
An initial statement from Booker says that the group will continue to operate the two former Musgrave brands alongside existing brands Premier and Family Shopper, with the Musgrave supply chain being used for deliveries to Booker retail customers. The increased scale and operational efficiency will help reduce prices, the statement added.
Booker and Musgrave are also entering into a new strategic partnership in Ireland to “explore opportunities to collaborate on store formats, digital innovation, buying opportunities, sharing of best practice and to achieve cost savings and efficiencies”.
Musgrave Group ceo Chris Martin commented: “Musgrave GB has been a loss-making business and while the decision to sell Budgens and Londis is difficult, it will allow the Group to drive forward with its growth strategy which is about developing our market-leading retail, convenience and cash and carry brands in the Republic of Ireland, Northern Ireland and Spain.
“The grocery market in Great Britain is experiencing fundamental and permanent structural change, with intense competition and a deflationary environment. Given these challenging market dynamics, we carefully evaluated all of the possible options for our GB business. Having received a proposal from Booker, we concluded that a sale to Booker is the right thing for the Group and would be the most advantageous outcome for our retailers, colleagues and suppliers in Great Britain.
“Booker will be a good fit for retailers and will continue to develop the Budgens and Londis brands utilising the supporting supply chain and head office. Retailers will benefit from Booker’s buying strength, an extensive operational footprint throughout Great Britain including a nationwide distribution and cash and carry infrastructure and a service culture that is proven to meet the needs of independent retailers.”
Premier retailer Dan Cock, who owns a store in Holsworthy, Devon, said he was “very excited” by the news. “For a long time fresh and chilled has been in growth and Booker has struggled a bit in this area, it’s never been what they’re about. But the Budgens own label fresh range will be huge for us, it’s exactly what we needed. Booker has nailed it in one hit.”