Local produce 'the way to beat supermarkets'

Musgrave, which operates the Londis and Budgens store franchises in the UK, will today reveal a 17 per cent increase in sales across its Irish convenience stores.

The chief executive, Chris Martin, said he wants to replicate the success of the Irish model, where convenience stores play a strong role within local communities, in the UK.

Musgrave's main convenience store chain, Centra,, saw sales increase to €1.2bn last year after the independent retailer owners invested €24m to revamp 64 stores. Like-for-like sales increased 8 per cent.

Mr Martin said convenience stores need to offer local products and services that cater for the community to differentiate themselves from the "blandness of the supermarkets". For example, one Centra store boasts the longest cheese counter in Ireland, while another specialises in fresh fish.

In the UK, Londis, which operates from 2,000 stores, saw a 4 per cent rise in like-for-like sales last year, while Budgens' sales increased 6 per cent.

Despite the convenience-store sector being the fastest-growing segment of the grocery store market, independent retailers have been under pressure from the major supermarkets as they encroach into their space. Tesco now operates more than 1,000 small stores across the country, while Asda recently signalled it will diversify into the sector.

However, Mr Martin said independent retailers need to put themselves back at the heart of the community with unique products and services.

"Retailers need to choose the right range of products for the local community," he said. "Local producers may not want to supply the whole country, but could supply a handful of stores."

One example of the move towards local sourcing is an agreement with Newitt's, a family butcher based in Thames, Oxfordshire, to supply meat across Budgens stores in the area.

Musgrave is in the process of selling Budgens stores to independent retailers who will buy in Budgens produce and can also source local products requested by shoppers.

Musgrave currently operates around 130 Budgens-owned stores, while 80 are owned by independent retailers.

One example is the recently opened store at Virginia Quay, east London, which is focusing on buying in ethnic products.