Budgens retailers have offered a cautious welcome to the brand’s premium, locally- centred vision, but warn it might not be enough to revive the model.
Musgrave GB managing director Peter Ridler recently told C-Store that he wanted Budgens stores to offer “posh nosh for the masses”, with a strong local offering. The company-owned ‘laboratory’ store in Broadstone, Dorset, which stocks more than 400 local lines, provided a template for the strategy, he said.
In response to the vision, one Budgens retailer said: “It’s the only realistic strategy, they’ve got nowhere else to go - they can’t compete on price. Their operating costs are such that they need a premium model.
“My concern is they think that selling quirky, specialist products is enough to save the model. What they’re doing with specialist products is right, but we need to sell other things at a decent margin to make a decent profit.”
Another retailer commented: “They’re looking for some kind of premium offer based loosely on the Waitrose offer. Whether it’ll increase sales is the devil in the detail. But I think they’ve got the right ideas - nothing else would work.”
With his 10-year contract nearing expiry, he was still to decide on his future, he added. “I’m trying to sell my store - I may stay but I’ll have to ‘do a Broadstone’ if I do, which isn’t an outrageous demand because the store needs updating anyway. And the only ones who have benefited are the ones who have spent a lot on refits.”
The other retailer called on brand owner Musgrave to offer store owners an incentive to renew their contracts. “There are a lot of disaffected retailers who have gone past the point of staying. Budgens can’t be successful if a quarter of the estate is planning to sell in two years’ time. They’ve got to present something to us to entice us to carry on. At the moment there isn’t a huge amount of reward,” he said.
A third retailer said: “The strategy hasn’t been consistent enough to rely on, there isn’t much focus. It is the independent retailers driving innovation; that’s their saving grace.”
Replying to the concerns, Ridler added: “The focus on fresh and artisan aims to improve margins and attract new customers, therefore the proposition itself will change some of the nature of the business model.
“We are talking to retailers about renewing their agreements with us. However, each renewal with our retail partners is an individual matter with separate points of negotiation.”