Budgens and Londis brand owner Musgrave Group has reported sales of €4.5bn up 1.6%, delivering a profit of €71m 1% below last year, in its financial results for 2011.

Debt increased from a net cash position of €21m in 2010 to €187m at year-end following the acquisition of Superquinn.

Chris Martin, Musgrave Group chief executive, said: “Despite the economic challenges and a consumer that is focused on spending less, we have delivered a good performance with turnover and profit remaining steady for the third consecutive year. This year continues to be tough but our brands are performing well, benefiting from customers who want to shop locally for value.”

Martin said the past three years have brought profound and permanent change to the grocery sector in each of its markets, and against that backdrop, Musgrave initiated a transformation programme to strengthen its brands and to improve the competitiveness of its business. “Through brand innovation, investing in consumer insight, improved partnership with suppliers and a sustained focus on cost reduction we have delivered better value to consumers,” he said. 

In the UK, Musgrave has continued to make progress with its Budgens and Londis brands achieving retail sales of €2bn in 2011. “We have been investing heavily in value by cutting the price on thousands of products while improving the quality and depth of range in our 2000 Budgens and Londis stores,” said Martin. “Investment in brand development and innovation helped us to deliver on our recruitment targets with the number of Londis retailers increasing by more than 100 bringing the total to 1,879.”  

Martin added that the outlook for the Group in 2012 remains challenging, particularly in Ireland where it expects to see little to no growth in the grocery market. “For 2012 we are continuing to improve the quality and depth of the offer for shoppers with the introduction of the SuperValu Own Brand range in Ireland and the UK,” he said. “Initial customer indications are good with a 15% increase in Own Brand sales. We are forecasting to achieve €1bn in own-brand sales across the Group by 2014.”

“Through our transformation programme we are now a stronger more efficient business with market leading brands and the agility to respond quickly to changing consumer demand. We have put in place medium term debt facilities as well as a long term private placement which has given the Group available facilities of €435m. Together these elements are providing us with the solid foundations to support our retail partners and to deliver sustainable growth.”

“Going forward, our focus will remain on investing in price for an increasingly budget conscious consumer and working with our retail partners to ensure innovation and value are at the heart of our offer. Through ensuring that our brands are different and better, growing in our core markets and driving efficiencies in every aspect of our business we are confident of delivering sustainable growth for Musgrave and our retail partners.”

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