UK: Budgens AGM reveals double-edged results
In the trading update provided at today's (20 September) AGM, British food retailer Budgens PLC revealed a 4% growth in sales during the nineteen weeks leading up to 19 September. It also, however, announced that development of its Internet home shopping service had been halted due to poor performance.In a statement, Budgens said that trading was very much in line with expectations; the 4% growth in overall sales supplemented by a 2% increase in like-for-like sales. These results are good compared to last year, and have increased "despite increased competition in the UK food retailing and poor weather conditions."Contrasting this, the future of Budgens Direct, the Internet home shopping service, is becoming questionable. Its performance had not been line with expectations and the e-commerce activity will be ceased on 25 September. CEO Martin Nyson explained: "At this stage there is a low level of customer interest. Whilst we will continue to offer home delivery from selected stores, we have decided to cease the Internet operation.""We believe," he added, "that we can continue to deliver greater value to our shareholders by focusing on our core proposition of fresh food based neighbourhood stores."The latter comment is reflected in a series of strategic initiatives currently being pursued by Budgens. These include increasing the numbers of retail outlets, the development of the Budgens Local business partnership concept with independent retailers and the re-naming of small convenience stores as "Budgens Express."
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