In March last year, when Noel Kavanagh Jr took on a 9,000 sq ft former Somerfield store in Hedge End, near Southampton, it was in a sorry state. “It was a tired old store,” he says. “They hadn’t spent money on it in some time - it certainly wasn’t the state-of-the-art supermarket we’ve got now.”

With financial backing from Musgrave, Kavanagh’s fifth outlet is a Budgens ‘concept store’, and is kitted out with cutting edge fixtures and fittings to help Kavanagh compete with the multiples - and The Co-op store across the road. The transformation starts at the entrance, where the scent of fresh bread wafts from the store’s new bakery.

There’s also a newly installed deli counter, parallel to the fresh food section. “It has a high footfall and gives staff an opportunity to engage with the customers and make it a more foodie experience,” explains Kavanagh.

Deli sales have grown from a standing start to 3% of turnover since last March, which is high for a Budgens store. And it’s still growing. And next to the deli, a meat counter is staffed by two full-time qualified butchers. “It’s been a real success,” he says. “The butchers can talk about how to cook something and cut meat as required.”

“There’s a difference between paying lip service and bringing a category to life”

Noel Kavanagh Jr

Having the butchers’ counter has also allowed the store to react to seasonal demand. On one sunny weekend last year meat sales grew 151% because the butchers decided to marinade and pack meat for barbecues.

Being a Budgens store, Kavanagh is obliged to buy 95% of his products from Musgrave, but that free-styling 5% can go a long way when it comes to creating a vital point of difference to the multiples. At the front of the produce section, locally grown products are displayed in wicker baskets on a table marked ‘season’s finest’.

“I see touches like this as crucial for the brand to compete on fresh food,” says Kavanagh. The store also stocks local produce such as eggs, chutney and ale from suppliers too small to deal with the mults. “There’s a difference between paying lip service and bringing a category to life. These are interesting products. Stocking them supports local businesses and gives customers the opportunity to buy things they can’t in the multiples,” explains Kavanagh.

These initiatives have also driven huge growth. Since 29 March (when the refurbished store opened) to December, produce sales grew by 44%, fresh bread sales have risen by 65% - and meat and fish sales are up a whopping 70%.

But supporting local businesses and having an impressive fresh food range is only part of the story. “What’s really made the focus on fresh work is that it sits alongside very competitive pricing and promotion,” says Kavanagh. “We’re not trying to be Whole Foods.”

There are round pound and two-for-£2 promotions on produce as well as half-price meat deals. And throughout the store are hundreds of shelf-wobblers advertising the fact that Budgens matches Tesco prices on branded lines. The store has also installed a 1,000 sq ft Subway concession, which has attracted a younger demographic at lunch time and in the evening.

Musgrave hopes to use the concept store to attract other operators. Based on the results achieved so far it’s a compelling proposition. Adds Kavanagh: “The Co-op is also a good brand but I’m very comfortable what we have is competing and continuing to grow sales.”