There are grumbles at the millions going to directors but retailers see the benefits says The Grocer news team
Most Londis retailers contacted by The Grocer this week welcomed the bid by Musgrave to buy their group, but they were divided over the issue of the £20.4m bonanza shared by Londis’s top four directors, compared with the £10,000 payments for them.
Lynden Griffiths, who runs Post Office Stores, Blackmill, Bridgend, voiced the feelings of several retailers when he said: “I’m very annoyed by the size of the directors’ payout.”
Dave Fenwick, who owns stores in Wootton Bassett and Marlborough, Wiltshire, said: “All the store owners who make £40,000 per week getting the same as someone making £5,000 doesn’t seem fair.”
Shahid Ali, who runs a store in Mintlaw, Aberdeenshire, was sanguine: “It’s a lot of money [for the directors], but to be honest I don’t begrudge them.
“What matters to me is the long-term future of the business and if it means we get better terms and a better range, it’s a win-win situation for everyone.”
Musgrave was unable to elaborate on the background to the deal beyond a brief statement issued on Tuesday, as bosses had signed a confidentiality agreement.
However, Budgens’ Wellingborough depot has been overstretched for months, and at its supplier conference in October, the company admitted that expansion was impossible without additional distribution capacity or major changes to improve throughput at Wellingborough.
Three new distribution centres from Londis would not only ease the pressure on Budgens’ supply chain, but give the company a supply route into the north of England and Scotland.
Wholesale sales by Londis to members topped £510m in the year to January 31, 2003 which, combined with Budgens’ £500m-plus turnover and the £1.5bn Musgrave makes outside Britain, should give Musgrave considerable clout with suppliers, although those we talked to would not be drawn on commercial implications.
The benefits to Londis retailers, though not likely to materialise immediately, are also clear, insists Musgrave executive chairman Eoin McGettigan: better range, better terms and more support - in addition to £10,000 in the bank.
“Londis shareholders can continue operating as independent storeowners, but benefit from an even better distribution network and the marketing and franchise support which Musgrave is able to offer.”
The Irish group won praise from executives at rival symbol operators, with Spar MDJerry Marwood and CJ Lang chief executive David Walker taking their hats off to McGettigan as a “fellow champion of the independent cause”. However, like Costcutter chairman Colin Graves, they also see it is a major opportunity to pick up some new recruits.
The question now on everyone’s lips, given the flurry of merger and acquisition activity in the last 18 months, is who is next?
Most Londis retailers contacted by The Grocer this week welcomed the bid by Musgrave to buy their group, but they were divided over the issue of the £20.4m bonanza shared by Londis’s top four directors, compared with the £10,000 payments for them.
Lynden Griffiths, who runs Post Office Stores, Blackmill, Bridgend, voiced the feelings of several retailers when he said: “I’m very annoyed by the size of the directors’ payout.”
Dave Fenwick, who owns stores in Wootton Bassett and Marlborough, Wiltshire, said: “All the store owners who make £40,000 per week getting the same as someone making £5,000 doesn’t seem fair.”
Shahid Ali, who runs a store in Mintlaw, Aberdeenshire, was sanguine: “It’s a lot of money [for the directors], but to be honest I don’t begrudge them.
“What matters to me is the long-term future of the business and if it means we get better terms and a better range, it’s a win-win situation for everyone.”
Musgrave was unable to elaborate on the background to the deal beyond a brief statement issued on Tuesday, as bosses had signed a confidentiality agreement.
However, Budgens’ Wellingborough depot has been overstretched for months, and at its supplier conference in October, the company admitted that expansion was impossible without additional distribution capacity or major changes to improve throughput at Wellingborough.
Three new distribution centres from Londis would not only ease the pressure on Budgens’ supply chain, but give the company a supply route into the north of England and Scotland.
Wholesale sales by Londis to members topped £510m in the year to January 31, 2003 which, combined with Budgens’ £500m-plus turnover and the £1.5bn Musgrave makes outside Britain, should give Musgrave considerable clout with suppliers, although those we talked to would not be drawn on commercial implications.
The benefits to Londis retailers, though not likely to materialise immediately, are also clear, insists Musgrave executive chairman Eoin McGettigan: better range, better terms and more support - in addition to £10,000 in the bank.
“Londis shareholders can continue operating as independent storeowners, but benefit from an even better distribution network and the marketing and franchise support which Musgrave is able to offer.”
The Irish group won praise from executives at rival symbol operators, with Spar MDJerry Marwood and CJ Lang chief executive David Walker taking their hats off to McGettigan as a “fellow champion of the independent cause”. However, like Costcutter chairman Colin Graves, they also see it is a major opportunity to pick up some new recruits.
The question now on everyone’s lips, given the flurry of merger and acquisition activity in the last 18 months, is who is next?
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