In the papers this week 13 – 19 June 2009

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Mandate serves strike notice on Tesco; rate of decline of retail sales is slowing; Diageo to shed 5% of Irish workforce



19 June 2009

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Trade Union Mandate is to serve strike notice on 19 Tesco Ireland stores in a dispute over cuts in staff working hours. The Irish Times reports strikes will initially take place on July 2nd, followed by more on July 9th and 10th; with possibly further strike action to follow. Mandate argues Tesco is using the recession as a means to reduce the living standards of workers in the pursuit of extravagant profit margins.

The rate of decline in retail sales volumes is slowing, but was still 17% lower in the year to April, according to the Central Statistics Office (CSO). The Irish Times states this compares with an annual decrease of 17.7% in March. However sales in non-specialised stores – predominantly supermarkets – rose 3% in the month.

Tesco Ireland has converted two more stores, at Bettystown in Co Louth and Ballinasloe in Co Galway, into part of its ‘ongoing re-pricing initiative’ this week. A company spokesperson told the Irish Examiner that the policy would continue, but declined to say which stores would come onboard next, on competitive grounds.

Diageo Ireland has announced it will shed 107 jobs or 5% of its 2,000 Irish workforce as part of a cost-cutting exercise. The Guinness owner hopes to achieve the redundancies on a voluntary basis, while support functions including sales and marketing are the areas facing closest scrutiny, according to The Irish Examiner.

Marks and Spencer has reduced its prices by 12% for all clothes, homeware and furniture in the Republic, according to the Irish Times – but has stopped short of introducing these “permanent price cuts” in food halls. The retailer defended this decision; claiming there had already been “significant” food price reductions in recent months.

Off-licences across the country are asking customers to sign a petition against the reduction in opening hours which came into effect last year. The Sunday Tribune reports NOffLA is heading up the campaign by sending the petition to some 350 members nationwide – and intends to send the signatures to minister for justice Dermot Ahern in order to demand a meeting on the subject.    

Spar Ireland saw more than a decade of double-digit growth come to an ‘‘abrupt halt’’ last year, relates The Sunday Business Post. A new report by Spar International showed its Irish division had retail sales worth €1.31 billion in 2008, up 2.6% on 2007. The Eurospar supermarket format, meanwhile, was Spar’s best performing unit in Ireland with increased sales by 8.7%.

Following M&S’ price reductions, Musgrave has pledged in the Irish Examiner that it will fight any challenge by competitors to its growing market share. The group stated that over the past year it had invested in price reductions of more than €140 million and the value of reductions will top this figure in 2009/2010.

Tesco has posted a 4.3% rise in underlying first-quarter British sales, reports The Irish Times. Although this showed a pick up in growth from the previous quarter, Britain’s biggest retailer is still lagging its main rivals. And while Tesco did not mention the Irish market specifically, the retailer said it had made market share gains in this unit due to price reductions.

Aldi MD Paul Foley has called on suppliers not to be "bullied" by major supermarket groups, into not supplying discount retailers. The Sunday Tribune reports Foley said at the British Retail Consortium’s annual conference last week that, "suppliers who are bullied into believing that low-cost-base businesses can be stopped are going to ruin their own businesses".

Asda has agreed a deal to open a supermarket in Newry – one of four new Asda stores planned for the North, another of which will be in Armagh. The Sunday Tribune takes a look at TNS Worldpanel research which shows that between them, Sainsbury’s and Asda have already taken 2.6% of the Republic’s grocery market, an increase of 300% year on year.

Slane Castle is now set to excel in producing not just rock ‘n roll history, but whiskey also. To secure the Co. Meath estate’s future, owners the Mountcharles are launching a premium brand Slane Castle whiskey in the US, and plan to create an information and tasting centre at the castle. The SBP reveals the nearby Cooley distillery made the first consignment of 1,000 cases, and some will be sold locally.

Cigarette prices could fall here, if the European Commission gets its way, reports The Sunday Business Post. Irish legislation currently bans the sale of cigarettes at less than 3% below the average price; effectively setting a minimum price cap. However, if the EC wins an action against Ireland at the European Court of Justice this week, the state will only be allowed set maximum, not minimum prices.

Meanwhile, Sainsbury’s chief executive Justin King has said the group plans to open 2.5 million more square feet of selling space in the next two years. With a 7.8% growth in first quarter sales, the Daily Mail reported that the group’s like-for-like sales increase “smashed” Tesco’s 4.3% growth.

Superquinn stalwart and Seanad member Ferghal Quinn reveals how belching cows are keeping him up at night in The Times. But it’s not the noise, its their greenhouse gas emitting tendencies that worry him. He explores how the industry can ensure the sustainability of our food supply chain. And because livestock accounts for 18% of global greenhouse emissions, believes we “must prepare for greater regulatory pressure to reduce beef and lamb consumption…possibly by higher taxes.”  

Dunnes is in a bitter dispute with neighbouring traders on Dublin’s Drury Street over plans to convert two long standing shops into a goods entrance and an ESB sub-station, reports The Irish Times. The traders have warned Dublin City Council that, if Dunnes gets permission to redevelop the listed buildings, it will set a precedent for major structural changes in the Victorian shopping enclave.

Aldi has lodged a planning application for a foodstore in Navan, just one month after Lidl made a similar application. The company paid €4 million for the well located 1.5-acre Brews Hill site which forms part of the grounds of the Navan O’Mahony’s Gaelic football club – the store will have a gross floor area of 1,541sq m (16,587sq ft) and a trading area of 1,125sq m (12,109sq ft), with parking for 114 cars and 24 bicycles in a surface car-park.




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