Musgrave’s acquisition of the Londis group in June last year was always going to be a bit of a bumpy ride. Finally forged after months of wrangling over fat-cat payments to Londis directors, it was no secret that many of the symbol group’s retailers were looking for fast progress under the new owner, in particular in key areas such as chilled and fresh produce.
Two promised loyalty payments of more than £15,000 each made life sweeter for the 2,250 retailers who decided to hang around as Irish wholesaler giant Musgrave set about improving efficiency and service for them.
The company claims it has much to be proud of in its first year and Mike Taylor, MD of the Musgrave business that has also swallowed Budgens, is quick to point out the gains that have been made so far.
Indeed, the tick list of ‘jobs done’ makes impressive reading. Not least among these has been the slashing of prices in key categories such as beer, tobacco, bread and milk, the mainstays of convenience outlets.
But Taylor insists that this has been just the tip of the iceberg. Other developments have included the ramping up of the Londis Overrider Discount, which now rewards top-performing retailers with paybacks quarterly and will see £5m handed back to Londis members this year - an increase of 25%.
The appointment of 16 more regional managers and two more regional directors is also a step in the right direction, says Taylor, as is the imminent next round of price reductions across key items over the next month as retailers prepare to receive their second and final payment of £15,822 for loyalty so far to their new overlords.
The establishment of Londis’ national retailer council, which meets four times a year and is headed by the chairs of 10 regional councils, has also helped keep retailers informed of progress, such as the imminent extension of Londis’ chilled catalogue from 500 or so items to 750.
However, Musgrave has only been able to please some of the people some of the time, and has suffered its fair share of setbacks in the past year. Not least was the high-profile departure last August of two of the founders of the Londis Shareholders Action Group - Adrian Costain and Kishor Patel - which was set up to oversee the protection of retailers’ interests as Musgrave moved in to buy Londis.
A row over the implementation of 0870 numbers that retailers had to dial to get in touch with the new business was also not a PR triumph, while some Londis shop owners have complained about poor delivery and delays over basic services such as the distribution of promotional leaflets.
This may help explain why exclusive new research for The Grocer suggests that Taylor and his team are now in a race against the clock to keep hold of some members. But the good news is not that many are thinking of jumping ship - just 4% of retailers.
The figures, based on a survey of 200 of Londis’ 2,200 retailers, suggest Musgrave may be about to lose 88 members after the second round of cheques are sent out on August 9. A further 16.5% are keeping mum at this stage, while Musgrave appears assured of the continued loyalty of no fewer than 1,749 or 79.5% of Londis retailers as it proceeds with plans to improve services, conditions and trading practices.
Not surprisingly, rival wholesaler and symbol groups have already been circling with the names of Nisa-Today’s, Booker, Costcutter and Spar among those mentioned.
But Raj Chandegra, chairman of the Londis national retailer council, is backing Taylor’s claim that life is already better under Musgrave and that it will only get sweeter. “Moving is not a decision to be taken lightly. I would urge retailers to stick around. I think they will find it is worth their while.”