Retailers who had labelled Musgrave a “sinking ship” will no doubt be pleased to hear that Musgrave has a turnaround programme in place.
Last Friday, the Irish wholesale giant posted a 16% drop in profits driven by the “disappointing” performance of its GB operation, where sales slumped 3%. It also wrote down €131m of assets from its GB business.
But as group CEO Chris Martin explains in this week’s issue of The Grocer, Musgrave made “mistakes”. And it now has a turnaround programme in place to reverse the fortunes of its struggling Londis and Budgens brands.
Last year, a strategy to grow sales by relaxing key retailer disciplines failed to deliver profitable sales and much of the turnaround programme will focus on tightening up the quality of the estate. Musgrave will also demand more discipline from retailers into the future.
News of a turnaround programme will be welcomed by retailers across the estate, some of whom have expressed concerns over a raft of high-profile exits. But retailers will also find they have to toe the line if they are to help steer the company forward.
In a market permanently changed by multiple retailers who have “professionalised” the sector, Musgrave will be looking to sharpen up its offer if it is to compete in the long run.
And, as Martin told The Grocer last Friday, it would rather its “club became smaller in order to compete better and grow”. The company has, he explained, drawn a line in the sand and will expect more discipline from retailers in the future.
The beginnings of the turnaround will likely be seen over the coming weeks. But in the meantime, retailers will be hoping new MD Peter Ridler, who took over from Donal Horgan earlier this month, will be the man to navigate Musgrave GB back to growth.
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