Silence is golden
Published: 10 September, 2007
Cork-based firm Musgrave is a tremendous power in retailing in Ireland and yet it attracts little of the media attention or occasional opprobrium often generated by Dunnes Stores or Tesco Ireland. In many ways, with its Centra and SuperValu brands, it is the quiet but highly effective third force in Irish grocery retailing, but this in no way diminishes its retailing capacity and influence.
Musgrave was founded in 1876 by brothers Thomas and Stuart Musgrave as a food wholesaler in Cork. About 30 years ago, it set up Centra, its convenience store brand. Its other big retail brand in Ireland is SuperValu, with bigger supermarkets aimed at meeting weekly shopping needs.
Last year, Musgrave's turnover was €4.6bn and, for the eighth year in a row, delivered substantial profit growth as Ireland's biggest food and grocery distributor.
Centra and SuperValu are built around local retailers, creating opportunities to compete against the multiples and the two German discounters, Aldi and Lidl, which are growing strongly in Ireland.
Both brands operate on an all-Ireland basis, with 407 Centra stores in the Republic and 82 in Northern Ireland, while the Republic has 180 SuperValu outlets and Northern Ireland has 38. Its two other convenience outlet chains, DayToday and Daybreak, have 266 retailers across the island of Ireland.
Chris Martin, Musgrave's group CEO, says Centra and SuperValu operate on the basis of local knowledge and service, with local entrepreneurs knowing the needs of their communities inside out. Price is important, naturally, as is service and product quality. Within Ireland, 75 per cent of all products sold in the stores are sourced in Ireland. Often, this brings very substantial benefits to suppliers. One example quoted by Musgrave is Athlone-based Oliver Carty Meats, which does substantial business with SuperValu. Eight years ago, its turnover was €3.4m; last year it was €22m.
Innovation is at the heart of store improvements. Many new design features are being included in Centra and SuperValu stores, such as electronic menu boards, touch-screen automated ordering of food-to-go and free Wi-Fi access.
New food products and preparation methods include wokery and hot ciabattas, while the SuperValu store in Clonakilty, Co Cork, has the largest cheese counter in Ireland.
Donal Horgan, managing director of Centra and SuperValu in Musgrave, says: "We have clearly responded to the lifestyle shift among Irish consumers and are meeting their demand for easily accessible and convenient stores, local service and high quality food, at the most competitive prices."
Strong advertising and marketing support comes as part of the package. Musgrave is also keen to support local community schemes, such as the all-Ireland Tidy Towns competition, which it has sponsored for 17 years, with a further five years agreed in 2006.
In addition to Centra and SuperValu in Ireland, Musgrave also has cash and carry operations and food services for the catering industry. Recently, it bought J&J Haslett, a major food wholesaler and cash and carry operator in Northern Ireland, which supplies almost 200 Mace and 70 XL Stop and Shop stores, as well as seven cash and carry outlets. Last year, Hasletts had a turnover of €282m. The Haslett's acquisition gives Musgrave about 16 per cent of the retail grocery market in Northern Ireland. Expansion plans in Northern Ireland include more new product lines and ranges.
Musgrave also has substantial interests in Britain and Spain. In Britain, it bought the Budgens chain in 2002 and Londis in 2004. A total of 74 company-owned Budgens stores in Britain are due to be in independent ownership by next year. And in Spain, Musgrave operates convenience stores and cash and carry outlets under the Dialsur, Dialprix, Dicost and SuperValu brands. In total, between Ireland, Britain and Spain, Musgrave now serves more than 3,000 stores.
Martin says that the aim for this year is further solid growth, focusing on innovation and enhancing its retail brands, but cutting costs without compromising quality. This year, in Ireland, Musgrave and its retail partners will invest more than €180m in new stores and developing existing outlets. Eight new SuperValu stores are being opened this year and a further 15 existing supermarkets revamped. Centra plans to add a further 37 new stores this year.
Horgan concludes: "We are passionate about innovation and are fully focused on bringing bright new ideas to the fore, that not only meet, but anticipate consumer needs, in such areas as health and wellbeing, food-to-go and in-store technology."
