Annual report & review 2006 - Shopic.com

Review of 2006
Our business in Great Britain
In Great Britain, we completed our acquisition of
Budgens convenience stores in 2002 and bought
the Londis franchise in 2004. Our aim is to replicate
the success of our Irish model by helping to create
exciting retail businesses that play a strong role in local
communities in Great Britain. This means enabling
independent retailers to meet the unique demands of
the communities they serve with a distinctive blend of
products and services and increased emphasis on local
sourcing.
Over the past 12 months we have continued to sell our
corporately owned Budgens stores to independent
retailers. This is in keeping with our overall philosophy of
supporting entrepreneurial retailers in all the markets in
which we operate. Across the network of Budgens stores,
local retailers are now being recruited and the transfer
process is well under way. We are taking our time with
this process, ensuring that in all cases we match the
appropriate retailer with the right type of store.
At the end of 2006, 74 stores remained in corporate
ownership, while 108 stores are now operated
independently. We expect all Budgens stores to be
owned by independent entrepreneurial retailers by 2008.
Budgens offers customers quality fresh foods, great range and
local produce with that all-important local convenience
We are pleased with like-for-like growth of 3.8 per cent
from our Londis business.
During 2006 our independently operated Budgens
stores achieved an impressive like-for-like growth of
5.5 per cent, demonstrating the success of our business
model.
Our business in Spain
Dialsur is our Spanish wholesale and retail distribution
business based in the Alicante region of South-East
Spain.
We are seeing how independent retailers working with
a model that leverages their flare and local knowledge
can compete and succeed in an extremely challenging
market. Unlike the multiples, our convenience offering
is not a cut‐down supermarket but a true convenience
store. Similar to our approach in Ireland, we are working
with local producers under initiatives such as Tastes of
Anglia, Taste of Sussex, Taste of the West, and Heart
of England Fine Foods to bring local products to local
communities.
We now serve more than 1,900 independently owned
Londis stores. As we continue to reshape our business
in Great Britain, our focus remains on the quality of
these businesses, store format, logistics, supply chain
management and produce. Our aim is to ensure that all
our Londis stores are compelling retail environments.
To grow our presence in this market, for the past few
years our focus has been on constructing new SuperValu
supermarkets in locations that are convenient to the
high population growth areas of the Valencia region and
Murcia.
In 2006 we increased the number of our Spanish
SuperValu stores to 18. Our Dialsur operation also has a
network of 53 Dialprix stores, 30 of which are operated
by independent retailers, as well as a chain of 17 Dialsur
cash & carry outlets. Sales across the business in 2006
were €181 million – up four per cent.
As in all the markets in which we operate, our aim is
not to own the retail stores in the longer term, but to
continue to seek suitable retail entrepreneurs to partner
in the region.
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Musgrave Group Plc Annual Report & Review 2006