Little buds sprout High quality fresh food could prove a strong selling point as Budgens looks to pull stores into its symbol group says John Wood While some of the major multiples have dabbled with supplying independent retailers, Budgens is the first supermarket group to launch its own fully fledged symbol group. But the introduction of Budgens Local has not been a surprise. Many in the industry have been expecting it for the last 18 months. When Costcutter's former deputy md Norman Kears was recruited by Budgens, speculation quickly started he would be setting up a new group. The only surprise is that it has taken 18 months for the group to be launched. Budgens' highly sophisticated distribution network, and in particular its fresh range, is the key to the new group's offer, according to chief executive Martin Hyson. Fresh food is a high profit, fast growing category, and Budgens' multi-temperature fleet of lorries will be providing daily deliveries to its stores. For entrepreneurial independent retailers, that fresh offer could be attractive. Hyson said fresh food makes up 37% of the offer in Budgens' local neighbourhood stores, a much higher figure than for the average symbol store. He said: "There are independent retailers who want to develop their business, but they can't at present because they can't get the right product mix supplied. "We will be able to supply high quality fresh produce, and because of our buying power they will be able to buy cheaper from us." In addition retailers will receive the full Budgens small store package, including advice on ranging, planograms, and the small store promotional programme. Retailers will be expected to bring their stores up to a standard, agreed between them and Budgens, but Hyson denied this would be prohibitively expensive. He said: "There are some excellent stores out there. For most it is likely to simply involve additional shelving and extra chillers." Store standards would be policed by the team which currently looks after the 40 Budgens forecourt stores, where Budgens supplies the product and retailing expertise but the stores are run by its oil company partners. Another attraction to existing symbol group members is that there will be no membership fee for the new group, and Budgens even supplies the fascia. Hyson suggested membership of the group could reach 50 in two years, a fairly modest target compared with the recruitment programmes of other symbol groups and c-store multiples, but then Budgens is after a fairly rare animal. "We're looking for independent stores whose demographic profile matches the profile of Budgens stores," he explained. Ideally this means a small group of stores of 2,500 sq ft to 4,000 sq ft, although single stores could be accepted, in a small town or a high footfall city location, and a turnover of £20,000. The choice is restricted further by the limits of Budgens' logistics network. Working out of its depot at Wellingborough, Northamptonshire, it supplies stores as far north as north Lincolnshire and south Derbyshire, down to the South Coast and as far west as Cheddar in Somerset. Hyson said the limits of Budgens' distribution would be about 30 miles beyond these stores. With these criteria, Budgens' most likely targets would probably be Nisa or Costcutter stores. But all three groups are members of the Nisa CBC buying consortium which also includes another symbol group, Londis. Hyson is proud of the fact that Budgens was a founder of CBC, and although he said it had not discussed its plans with its fellow CBC members, he did not envisage any problems. Executives of fellow CBC members were unwilling to comment on the record about the business of another CBC member, but one said the launch of Budgens Local was a long expected development and scoffed at the suggestion that the new symbol group presented any kind of threat to his business. He claimed Budgens had grown its forecourt side very slowly and added: "If I'm going to lose sleep about anything it would be the tie up between Shell and Sainsbury, but certainly not Budgens Local." With its focus on neighbourhood stores, the launch of Budgens Local is a logical strategy for the company. But it is not an easy option. Independent retailers are demanding customers, and they can't be ordered to toe the line the way the manager of a company owned store can. Budgens has an attractive offer for independents, but it will be its relationship with its new retail customers which will determine whether it matches even Martin Hyson's modest growth target. {{NEWS }}

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