Budgens to keep rebate scheme as part of business plan

Budgens has pledged to maintain its retailer rebate scheme after an outcry from retailers.

The rebate scheme was due to be scrapped as part of a new marketing and investment plan for the Budgens brand, but the company revamped its proposals following an open rebellion by members. Many retailers contacted C-Store with their concerns, explaining how the rebate is a vital part of the symbol group model, and in many cases the sole source of profitability.

Speaking to C-Store, Musgrave md Peter Ridler confirmed that the rebate scheme is remaining in place, as part of an £18m annual investment in the Budgens brand.

“The rebate is now off the agenda, and will remain in place,” he said. “It has been contentious, but we’ve listened to our members and will continue to reward loyal retailers with our LOD programme.”

Other investment in the brand will take three main forms, namely proposition, technology and marketing, Ridler continued, with an increased focus on improving margins by driving even higher participation of fresh food in the product mix.

The focus of ‘proposition’ investment will be to get more stores aligned with the new model currently trialled at the company’s Broadstone store, with new product ranges and stronger sales of fresh and local products, while a major investment in technology will enable stores to offer click and collect, and to operate mobile self-checkouts if required.

As part of the new marketing plan, there will be increased spending on above-the-line advertising, including a new TV campaign to be launched in the autumn. In addition, a new Budgens own-brand is to be developed, with the SuperValu label to be phased out of Budgens stores but retained in Londis outlets.

“We will change our approach to media,” Ridler added. “Until now, our marketing has been based around customer leaflets, but we will be expanding into TV, press and digital advertising this year.

“We will be stepping back from SuperValu which we recognise doesn’t fit with the Budgens brand proposition. The new Budgens label will sit in the middle-to-premium space, and will predominantly be in fresh food, which is central to the brand proposition.”