Budgens retailers are furious that Musgrave GB is considering scrapping the price rebate scheme, which one store owner warned could “put a lot of us out of business”.
Musgrave GB managing director Peter Ridler confirmed to C-Store that it was looking into redirecting the rebate spend into other areas, such as marketing and media.
“As we move in 2015, we are looking for agreement on a number of financial and budgetary matters, one of which is our media and marketing spend,” he said.
“The question is: would the money we are currently spending on rebates be better spent somewhere else? Such as by supporting the brand, driving footfall into stores and increasing sales.
“We’ll continue to discuss it with our partners and the National Retail Council and hope to have an agreement in place by the new year.”
One prominent Budgens retailer said he would lose tens of thousands of pounds a year if the price rebate was scrapped. “We accept the low margins as we knew we’d get the rebate. This would put a lot of us out of business and would be a signal for us to exit,” he said.
Mike Duffy, of Duffy’s Budgens in Lightwater, Surrey, added: “If this happens it would cause great concern and would affect profitability and the allegiance of store owners to Musgrave.”
Another retailer said the move would be “the ultimate in broken word and violation of trust. There was a commitment it would be there forever”.
A fourth retailer added: “They don’t consult us in any form whatsoever. We just don’t know what’s going on.”
C-Store understands that the money spent on rebates runs into millions of pounds.