Budgens store owners have expressed their relief and renewed confidence in the brand after Musgrave GB performed a U-turn on plans to scrap its retailer rebate scheme.
The rebate scheme was due to be scrapped as part of a new marketing and investment plan for the Budgens brand, but the company revamped its proposals following an open rebellion by members. Many retailers contacted C-Store with their concerns, explaining how the rebate is a vital part of the symbol group model, and in many cases the sole source of profitability.
Speaking to C-Store, Musgrave md Peter Ridler confirmed that the rebate scheme would remain in place as part of an £18m annual investment in Budgens.
Other investment in the brand will take three main forms, namely proposition, technology and marketing, Ridler continued, with an increased focus on improving margins by driving even higher participation of fresh food in the product mix.
Welcoming the decision, Paul Gardner of Budgens Islington, London, said: “I’m really relieved and pleased that the plan is a good one to take the brand forward, and also suits my store. I do accept the partnership has to work for both parties, but my concerns have been eased for now.”
Mike Duffy of Duffy’s Budgens in Lightwater, Surrey, said: “I am extremely pleased Peter and his team have reversed their decision. It shows courage.” But he added that Musgrave now had “a challenge to win back retailer confidence”.
David Knight, who owns two Knight’s Budgens stores in West Sussex, said it was unfortunate that it was “done in the way it was done”. “But ultimately retailer profitability has been stabilised and the overall strategy is the right decision - it’s a good clear vision,” he added.
The focus of ‘proposition’ investment will be to get more stores aligned with the new model currently trialled at the company’s Broadstone store, with new product ranges and stronger sales of fresh and local products, while a major investment in technology will enable stores to offer click and collect, and to operate mobile self-checkouts if required.
There will be increased spending on above-the-line advertising, including a new TV campaign to be launched in the autumn. In addition, a new Budgens own-brand is to be developed, with the SuperValu label to be phased out of Budgens stores but retained in Londis outlets.
“The new Budgens label will sit in the middle-to-premium space, and will predominantly be in fresh food, which is central to the brand proposition,” Ridler said.
David said it was “reassuring” Supervalu was being phased out, and he welcomed the “aspiration” of the plans for click and collect, which he would consider himself.
“However, there is a caveat in that the overall proposition won’t do it for stores in less affluent areas, where a focus on fresh and niche products won’t work. What they do with those stores is the big question,” he said.