Musgrave Budgens Londis (MBL) maintains it is on course to divest its entire Budgens estate to independents by 2008.

Currently, about 250 stores operate under the Budgens banner, of which about 90 are independently owned. Of the remainder, half have been earmarked for specific independent retailers, with the rest likely to be snapped up within two years, according to MBL managing director Mike Taylor.

He told C-Store: “We have divested seven Budgens stores this year and aim to dispose of one a week until the end of the year. If we complete 60-65 this year, then that’ll leave us with a similar number for next year.

“It has taken 15 months to clear the backlog of applications. In any case, there’s no hurry - we own the stores anyway - it’s just we believe that independents will take more money in these outlets than we will. Everyone who has converted has seen sales increases.”

MBL also aims to recruit about 25 new stores a year to the Budgens fascia, while at the same time increasing the differentiation between the Budgens and Londis offers. The former Budgens Express estate based in London and the South East is being sold to independents as well, but as Londis stores.

Taylor said: “We want minimal overlap between the two brands. All Londis stores are less than 3,000sq ft, whereas Budgens outlets measure up to 14,000sq ft. A viable Budgens needs to be over 2,000sq ft, be turning over more than £25,000 a week and have a fresh mix of 30% or above. The key matrix is the fresh mix. If it was a big store but doing most of its business in snack food then it would be better off staying Londis.”

He added: “The mass exodus of retailers from Londis has failed to materialise and those who have left have generally been at our instigation or by mutual consent. We are generally taking on fewer members, but at higher standards.”

As the brands become more distinct the group is aiming to create a single supply chain by the end of 2007. Londis retailers in the South already receive goods sourced by Budgens from the Londis depot in Andover, Hampshire, while others receive fresh produce from the Budgens warehouse in Wellingborough, Northamptonshire.

Soon Budgens retailers will be able to receive goods out of Londis distribution centres, too, and increasing numbers of products already successful in Budgens stores are now available to Londis members.