Budgens retailers have raised concerns over margins and poor availability of the group’s new Discover the Taste range.
The premium range was designed to capitalise on shoppers’ growing desire for high-quality prepared meals, and followed last year’s launch of the SuperValu mid-tier brand - which retailers claim has also suffered from supply issues.
Although retailers have praised the quality of the product, a number of store owners - who wished to remain anonymous - have highlighted supply issues. Two major retailers said the Prawn Linguine and Fish Pie lines had been unavailable since launch more than four weeks ago.
Margins were also a concern. Said one: “It’s a great product, but there’s no margins - it’s single-digit and that’s without wastage. It’s selling well, too, and as I’m a top-selling store that’s even more worrying.”
“I’ve got major concerns about its profitability,” another said. “With the short shelf life there’s also a lot of wastage.”
He also pointed out that current availability of the Moussaka was just 24%.
Another prominent Budgens retailer said Discover the Taste was costing his business about £200 a week. “It’s a great product with superb packaging, but not enough has been done to market it,” he said. “Margins are a worry.”
Ascot retailer Vince Maloney in Berkshire was more positive. “We’ve got to give it a chance. The quality is very good.”
John Pattison, Budgens sales director, said Discover the Taste was created to provide a high quality food for tonight offer to compete with the multiples’ “extremely competitively priced” offers, which act as a footfall driver.
“Any meal deal will always have some impact on margin but we have already seen in the weeks since launch that Discover the Taste is increasing footfall to stores and subsequently creating a halo effect on sales across categories,” he said. “We are fully supporting our retailers with additional margin for the first eight weeks of sale to help them with wastage which may occur from the shorter shelf lives of these products.”
He added that high demand for the products had resulted in some supply issues in the first few weeks, “but we have been working hard with the supplier to resolve these and we are now in a position to be able to meet these exceptionally high levels of demand”.
The SuperValu range has also come under fire from retailers. “Availability is sporadic at best there are real supply issues. SuperValu crisps disappeared over the summer peanuts have been gone for six weeks pasta sauces disappeared just before the summer,” said one of the retailers. Another said a number of SuperValu coffee and cereal lines had disappeared.
Adam Hogwood, manager of Morrison’s Budgens of Broadstairs, Kent, added: “Crisp snacking bags were unavailable over the summer. But we could fall back on side suppliers who give us better margins anyway.”
Budgens said availability of SuperValu products for Budgens retailers had run at 97.90% in its first six months.