Musgrave Budgens Londis (MBL) is looking to change the face of UK independent retail. Replete with 28,000 unaffiliated independents, the UK market is crying out for a refit and MBL believes it is in a strong position to strengthen its own brands and the concept of local retail, in one fell swoop.
At its annual suppliers conference last week, in the heart of Warwickshire, MBL representatives told delegates the company was successfully achieving its aim of being “The Number One Supporter of Independent Retail” - a point supported by the various retail industry awards collected by both Londis and Budgens since the inauguration of MBL in January of this year.
According to group commercial director, Padraic Liston, Irish constituent Musgrave has achieved astounding success with its two retailer brands, Supervalu and Centra. The company’s objective now is to replicate this success with its UK partners, Budgens and Londis, said Liston, and he urged suppliers to recognise the positive change that MBL could enact upon convenience retailing, by working in constant collaboration with retailers and suppliers.
MBL’s managing director, Mike Taylor, emphasised the importance for suppliers of forging long-term relationships within the chain and communicating closely so that the company could guarantee to supply its retailers with what they want, enabling them in turn to satisfy the needs of their mutual target, the consumer.
MBL trading director, Barry Williams, added that this compliance would hopefully reduce the complexity of supply chain issues, such as promotional plans, and ranging.
Taylor announced that MBL’s corporate store divestment programmes - its grand design to take Budgens from a regional to a national business - was progressing favourably. With stores opening almost every week, the boundaries of Budgen’s national presence are being pushed further and further from the confines of London and the south east.
He suggested that existing somewhere between the “Grocery group in the c-store market”, represented by Tesco, Sainsbury’s and Asda etc, and the “symbol group in the c-store market” adopted by the likes of Spar and Costcutter, Budgens was a uniquely valuable position.
Taylor explained that a key focus for MBL has been the formation of a clear distinction between the two brand profiles. The focus for Londis customers tends to be impulse buys, where speed of purchase is pivotal, with stores typically between 500 and 3,000 square feet in size. Meanwhile Budgens stores are customarily larger, ranging from 2,000-10,000 sq ft. However, Taylor said 50 per cent of the current Budgens stores were under 3,000 sq ft, and the newly emerging chain outlets were increasingly leaning towards the lower end of the size spectrum.
Historically, Budgens could be criticised for neglecting its fresh produce offer in some of its smaller outlets, especially in inner-city locations. However, Taylor, claimed the Express stores are not typical of the Budgens estate. Moreover, they are in the process of being divested as Londis shops, and a change in the supply chain is imminent, he said. “Londis stores currently get all produce via drop shipment supplies, hence the inconsistency, but we are shortly implementing a warehouse service based on Budgens quality product.” This strategy forms part of an overall objective to relinquish store ownership and move towards becoming a dual branded distribution-based service.
Taylor said MBL already deals with a small number of blue chip suppliers to ensure quality in the fresh produce category, but that this is an area of major growth, which will receive particular focus as the plans unfold. He highlighted the emphasis on specialised produce and local sourcing increasingly coming into play, and pointed to the fresh produce success in larger inner-city Budgens stores, such as the ones in Bow, Islington and Fulham, as a reminder of the standard for which the chain hopes to be renowned.
Jonathan James, chairman of the Budgens retail council, concurred that regeneration is definitely afoot at the small independent end of the chain. “As people are buying these stores, they are making them their own,” he said. “It’s all about personalisation. Londis has never really been particularly good at fresh produce but Budgens has always been very focused on fresh and is driving the category forward for the whole company.”
James said there were definitely lessons to be learned from Musgrave’s success with fresh in Ireland. “The fresh offer in Super Valu is unbelievable, in terms of the range and the presentation. The apples look like they have been polished.”
Yet, James is full of praise for the way in which Budgens handles smaller shops like his group of forecourts. “The good thing about Budgens is they do six days delivery and they pack to zero with all their customers so we will never have carry-over stock.”
The company has reduced pack sizes to cater for the limited shelf-space, and James said he has been co-operating with it to introduce a combi-pack, whereby small retailers get a selection of produce in amounts they can handle.
Understanding your customer base is key to any retail situation, and variety exists even within a forecourt environment, where, unlike his 7,500 sq m supermarket, fresh is not an obvious priority, James explained. “It is interesting because you get the people who pick up a piece of fruit with their sandwich,” he said. “Then there are the people who want ready-meals and those that want what I call ‘meals-to-get-ready’ which means the chef salads with bread and a cooked chicken from the hot counter to make a quick meal in the summer, or it tends to be carrots and other root veg like swede at this time of year.”
With forecourt customers spending an average of one minute and forty seconds inside the store, the onus is on the manager to make the fresh offer appealing and accessible. And this requires skilful delegation, he said. “What is key in this industry is to make sure a member of staff takes ownership of the fresh and chilled section, so that becomes their pure focus and standards are always maintained.”
While it is still largely in its infancy stages, James believes forecourts could be the next boom sector of the convenience market, if others begin to appreciate the great potential for success, and make fresh produce a priority. “Within the forecourt sector, £1,000 of my £40,000 a week turnover is fresh produce,” he said. That might not sound like a lot but it is for that kind of location and 10 years ago no-one would have dreamed they could go into a forecourt and buy fresh fruit and veg.”
The competition may be strong but that should only drive other companies, like MBL to prove their equal worth, he claimed. “Forty percent of Tesco Express’ sales are fresh and chilled,” he says. “They have laid down a bench mark for us and it’s up to us to deliver. If Tesco are doing it that’s what people want. Gone are the days of just having tinned peas and carrots. People are far more adventurous.”
MBL believes it has all the necessary components to develop independent retailing into a state fit for the twenty-first century. If its Irish partners are anything to go by, fresh produce could be a distinct selling point. However, only time will tell if Budgens and Londis can fulfil the niche they are aiming for and offer the right combination of goods to corner some of the market away from the reigning champions.
No comments yet