Musgrave to sell off 172 British stores

THE Musgrave Group is expected to recoup a large portion of the €270 million it spent on acquiring British symbol retail grocery chain Budgens in 2002 when it sells off 172 shops in Britain.

Musgrave intend to keep its association with the store following the sale as the 172 stores will join the existing 60 outlets which Budgens operates on a franchise basis similar to its Centra and SuperValu operation in Ireland.

Musgrave Group managing director Seamus Scally said the sale of the stores to individual retailers, managers or entrepreneurs was always part of their plan for Budgens and did not represent a change in policy.

"When Musgrave acquired Budgens in 2002 we said clearly that it was our long-term intention not to own stores. It is 100% full consistent with our ongoing strategy to support progressive independent retailers," he said.

Mr Scally would not speculate on how much cash the sell-off will realise for the company and when pressed said the company had not put a figure on what might be raised.

He stressed that the store sell-off was in no way connected with the company's current attempts to acquire the Londis operation in Britain.

The sell-off programme will begin immediately with stores being sold on a case-by-case basis. Mr Scally hopes the entire process will be completed by the end of 2007 and that each store will remain branded as Budgens.

"Budgens has performed very strongly over recent years, but we believe the stores will perform even better and be more responsive to the communities they serve if owned and operated by independent franchise holders," he said.

Mr Scally stressed that they will be welcoming applications from all interested parties, in particular, entrepreneurs who wish to carve out a profitable career in food retailing, existing independent grocery retailers and those with experience in supermarket management.

"We will not simply be looking for the highest bidder. It will be vital that the people who buy these stores share Musgrave's commitment to community-focused retailing." Mr Scally said Musgrave's commitment to the convenience store sector is deep-seated and historic.

"We fervently believe that grocery retail is best done by entrepreneurs who are owners and operators of their stores, who know and relate to the communities which they serve and have the independence of spirit to innovate, develop their stores and tailor their offer to take account of local consumer needs" he said.