Budgens will slash its product range from 7,200 to 6,000 lines and reduce promotional activity by a third in a bid to solve logistical problems.

Speaking at the chain’s annual supplier conference, Budgens chief executive Martin Hyson said availability had been hit over the summer by too many SKUs, capacity restraints at its Wellingborough central
distribution centre and restrictive terms from suppliers.

“Budgens tends to do well when there are extremes of weather. People want to shop locally,” said Hyson.

“This can push sales up 10-15%. But our logistics is not set up to deal with it.”

Currently, Wellingborough was clogged with excess stock because Budgens had to order in excessive quantities to get reasonable terms, said Hyson. “We want to reduce our stockholding from 15 days to nine and talk to suppliers about more sensible terms.”

Rationalising the range would reduce duplication and improve availability by cutting out ‘me toos’, he added. Several options were being discussed to improve forecasting and stock management and increase capacity at Wellingborough.

Trading director Cliff Goodman said Budgens was operating with one arm tied behind its back because of poor trading terms. He cited the double digit differential in cost prices charged by suppliers to Tesco and Budgens revealed by the Competition Commission.

Musgrave UK executive chairman Eoin McGettigan said he hoped last week’s opening of a flagship store at Hawkhurst in Kent would show suppliers what Budgens could achieve if given a level playing field.
Elaine Watson