Four out of five Londis retailers say that they are certain to pledge their allegiance to wholesaler Musgrave after receiving their second and final ‘loyalty’ payment next month, exclusive research for The Grocer suggests.
The poll of 200 of Musgrave’s 2,200 Londis retailers reveals that just 4% are seriously considering taking their business elsewhere after receiving £15,822 on August 9 - the second instalment of the £31,645 one-year golden handcuff payment they were offered to stay with the group when it was taken over by Musgrave in June last year - while 16.5% declined to comment at this stage.
The research, for The Grocer by The Knowledge Store, also shows that rival groups have already been circling to pick up retailers considering a move.
More than half of the Londis retailers surveyed claimed they had been approached by rival groups since last year’s creation of the Musgrave Budgens Londis retail empire, while a further 17.5% declined to comment. The main predators, said retailers, had been Nisa-Today’s, Booker, Costcutter and Spar.
Neil Turton, Nisa-Today’s MD of group commercial, claimed the company had already signed up “a handful” of Londis defectors who were set to begin the switch over as soon as they received their final payment from Musgrave. And he added that Nisa expected to make more signings in the coming months as the company was “overtly seeking to recruit Londis members” following the company’s disappointment at losing out to Musgrave in the race for Londis last year.
He said: “We thought Londis should have remained a mutual company and member-owned like our company is.
“A lot of Londis members liked owning their own company and not paying profits to a distributor and we expect to benefit from that as we go forward.”
One Londis retailer, who asked not to be named at this stage, said he had decided to leave Musgrave following a “torrid year” of trading with the group.
He claimed his business had been plagued by late deliveries and that a promise by Musgrave to send an area representative once a month to help him smooth out problems had failed to materialise.
However, another retailer, based in West Yorkshire, said he was planning to give Musgrave one year’s grace to prove itself before making a final decision.
Another, based in the south east, said that life under Musgrave had been “brilliant” and that he was definitely staying put.
Mike Taylor, MD of Musgrave Budgens Londis, said the business was confident of retaining the “vast majority” of Londis retailers after introducing a number of measures in the last year including 16 more regional managers, lower prices, more extensive product lines and a network of retailer councils.
>>p45 Resisting temptation
Simon Mowbray