Budgens retailer Kavanagh Group UK saw sales drop as the recession forced consumers to spend less on groceries.

The Irish group, which owns four Budgens stores, in Midhurst, Billingshurst, Selsey and Bishops Waltham in West Sussex, said sales dipped from £24.5m to £23m last year.

Shoppers had become more bargain savvy, said MD Noel Kavanagh Jr. "With the change in the economic climate we have seen a considerable shift in consumer buying patterns towards special offers," he said. "In particular, we have an increase in half-price and round-pound offers, hence while we have maintained our customer count on a weekly basis, which is a very positive sign, we have seen a reduction in customer spend, which has resulted in a slight drop in sales."

Budgens' owner Musgrave Retail Partners GB's overhaul of own-label ranges had also attracted customers, Kavanagh said. "Musgrave is working hard behind the scenes on developing our own-label range. In 2009 we introduced our new Good Value range, which has proved extremely successful."

Kavanagh Group is now planning a total revamp of its store in Selsey. The retailer is investing £400,000 on the refit of the 9,000 sq ft store to transform it into a state-of-the-art supermarket. It is expected to be completed by mid-May.

The chain also owns two Supervalu stores in Northern Ireland, and a further nine Supervalu stores in the Republic.