Budgens retailers have expressed concern over the symbol group’s recent performance and its wholesale prices.
Speaking to Convenience Store magazine, one Budgens retailer - who wished to remain anonymous - said margins were being squeezed due to high wholesale prices, causing him to struggle financially.
“It’s very concerning for us,” he said. “For some time now we’ve been forced to inject our own money into the stores when it should be the other way around. The difference between its own wholesale prices and its competitors’ is enormous, with margins up to 30% less than if I bought elsewhere. It’s just greed on their part and that is making it very difficult to stomach.”
The retailer added that he had taken concerns to management, but they had fallen on deaf ears. “It’s been raised to management, but the issue keeps getting side-tracked and put off,” he said.
“I really don’t know what their long-term plan is, but it’s as if they want retailers to give their stores back to them so they can be sold off. It’s a big issue with a lot of Budgens retailers and nobody I’ve spoken to is happy about the situation. We cannot afford to carry on pumping money into the business.”
Another top independent retailer, who also refused to be named, said that despite his store experiencing a growth in sales over the past 12 months, he felt that Budgens had been underperforming overall. Increased competition in the market had put pressure on the symbol group, he said, and it had “taken its eye off the ball”.
However, the retailer predicted Budgens would bounce back, but that it would first have to “improve its offering and support for retailers in order to keep up with the current market”.
Budgens sales director John Pattison put up a robust defence of the group’s performance. He told C-Store: “Overall, Budgens’ performance in 2013 was good, with retail sales figures beating the IGD market average in 13 of the last 14 weeks of the year. This is in spite of the tough conditions that all retailers have been operating in, reflected in 2013 market growth of just 0.3%. The market continues to be tough in 2014 but Budgens has started the year well, beating the IGD in four out of the six weeks to date.
“Our key priority is that Budgens continues to be the store of choice for local shoppers and the brand of choice for independent retailers and, in the main, Budgens retailers are holding their own against competition and for many, investment in their stores is driving growth. The success of our retailers is fundamental to the Budgens brand and we value the partnerships we have with them. This extends far further than a transactional relationship based on price and is reflected in the additional £7m we invested last year in areas such as the launch of own brand ranges, Tesco Price Match, range and individual store support.
“Our support for Budgens retailers continues and we have already announced to retailers significant additional margin investment for 2014. And through our Discover the Taste and Made Easy ranges we have some of the best quality own brand products in the independent convenience sector, helping retailers to offer ranges akin to the multiples’ convenience offer.”