Rewe, which owns 29 per cent of Budgens, accused the company of making a "crassly mistaken decision", and sacrificing long-term strategy for short-term gains.; Budgens said on Tuesday that it was selling some of its 12 Penny Market branches and converting the rest to the Budgens format.
The German outburst caught Budgens off-guard yesterday. The company said it was surprised and disappointed by Rewe's comments.
A spokesman for Budgens said a Rewe director on the board was involved in all decisions relating to the Penny Market move. The director had voted against the decision "but had not exactly made a fuss about it". He added that the director had not voted against maintaining the dividend.
Budgens said yesterday that most of its shareholders were quite happy with the company's performance. The management had done well to keep the company going through four years of attrition on the high street. British and German retailers adopt starkly different attitudes towards profits. In Germany, discounting is a fact of retail life and the large operators such as Aldi, Rewe and Lidl are often prepared to run at a loss for several years.