In the papers this week 17 – 23 October 2009

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Pictured: Ronald Kers of Valeo Foods Group (Photo by Dave Warren/Picture Team)

Aldi and M&S to build over 120 apartments in Dublin, ESRI calls Tánaiste’s proposed code dangerous and protectionist, Retail Ireland calls for VAT and excise to be reduced

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22 October 2009

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Tánaiste Mary Coughlan’s proposals for a grocery code of conduct will lead to higher prices, lower consumer welfare, and ultimately result in leading retailers sourcing more products abroad, according to the Economic and Social Research Institute (ESRI).

The Sunday Business Post reports the institute has argued in a paper entitled ‘How to do a lot of harm by trying to do a bit of good,’ that there is no rationale behind such a protectionist code.

 

 

Meanwhile in The Irish Examiner, Greencore chief executive Patrick Coveney has defended Tesco’s decision to stock more products from Britain instead of Ireland. According to Coveney, Tesco was "forced" to source goods from the UK as a result of the Government allowing discounters such as Aldi and Lidl to operate in Ireland, both of which source products from abroad.

 

It is up to 10 times cheaper to eat a poor diet than a healthy one, the Food Safety Authority of Ireland (FSAI) has found. The Irish Times reveals new research discovered fruit and vegetables cost 45c per 100 calories, compared with 17c per 100 calories for snacks, chips and biscuits. What’s more, the authority has urged the revision of retail planning guidelines to improve access to cheaper grocery outlets, on the grounds that a healthy shopping basket costs 58% of a welfare-dependent household’s weekly income in a local shop, 30% in a supermarket multiple and 26% in a discount store.

 

While developers can’t raise funds in the current banking crisis, "cash rich retailers," such as Marks & Spencer and Aldi are snapping up development sites, reports The Irish Independent. The retailers have received the green light for two projects which could see them build more than 120 apartments on two north Dublin sites, potentially generating over €17 million for Aldi and over €5.5 million for M&S respectively.

 

Sales of Tesco Finest ready meals are up by as much as 20% on last year, reports The Irish Times. Keen to exploit this resurgence, Tesco Ireland is rolling out a new apparently "even finer" offering, Tesco Finest Restaurant. The paper also reports on the fortunes of upmarket retailers’ ready meals, which are proving a hit with cash-strapped consumers who can’t afford to dine out, such as Avoca, Donnybrook Fair, Fallon & Byrne and Butler’s Pantry, the latter of which expects single digit growth this year.

 

In a planning application to Fingal County Council, Tesco has said it will build more stores and create new jobs but only if floor space caps are omitted from Fingal’s development plan. The Sunday Tribune reveals the retailer argued in its submission that "the appropriate provision of retail facilities at the source of demand" could deliver lower prices. It also claimed floor space caps "may result in reduced competition, reduced employment and underprovision of retail floor space, particularly where a settlement experiences rapid population growth."

 

Retail Ireland has called on the Government to reduce excise levels on alcohol by 20% and cut VAT by 18%. The Irish Examiner says that, according to the Ibec group’s director Torlach Denihan, the value of core retail sales, excluding car, fuel and bar sales, was down 9.7% in August. He also urges political parties to "ask their councillors to cut commercial rates by 20% when they vote on Local Authorities to set annual rate on valuation over the coming weeks"

 

The Irish Examiner also reports that ongoing sterling weakness poses a major threat to ROI retailers in the run up to Christmas, with cross-border shopping now estimated to cost the economy €430 million a year.

 

Tesco has announced a target to become a zero-carbon business by 2050, reports The Irish Times. The British supermarket chain aims to achieve a 30% reduction by 2020 in the carbon impact of the products in its supply chain, starting in Britain. One of initiatives introduced as part of this plan is a "buy one, get one free later" strategy, which will allow consumers to pick up their free product when they need it, helping to keep waste down.

 

The company behind the Rathdowney Shopping Outlet in Co Laois, AWG Outlets, lost €6.1 million last year after providing generous incentives to its tenants and writing off more than €4 million in the value of its assets. The Sunday Business Post reports that falling retail sales had resulted in some of its tenants going out of business or defaulting on rent, leading to a fall in its rental income. In fact, only 15 out of 32 available units are currently occupied.

 

"You have to be pretty fast to get some of [Tesco’s] promotional offers," is the verdict of The Irish Independent’s ‘Smart Consumer’ column. After quoting a price which had risen from €1.50 to €1.99 by the time of publication, the column was informed by Tesco that prices advertised in the inserts or pull-out on a Thursday will remain until early the following week.

 

Ita O’Kelly in The Irish Times examines how manufacturers could cut packaging across every grocery category. Although Irish people are now recycling 65% of waste packaging, she believes adhering more closely to the mantra "reduce, reuse, recycle" would be more efficient and has several suggestions on how this could be achieved; for example, consumers return empty beer and wine bottles to off-licences in return for credits.  

 

A new retail security system has been launched across Galway, reports The Galway Advertiser. A number of city retailers have signed up to the new Galway Crime Watch radio system, which uses technology and staff from local company Golden Eye Security, to link security between retailers in the city centre.

 

The Irish Independent has taken a look at the problems facing tobacco retailers in greater detail this week. However, the paper reports specialist tobacco retailers such as Dublin’s Kapp and Peterson have actually benefited from the display ban. The shop has stopped stocking cigarettes as part of a deal with the authorities to allow it to continue to openly sell pipes and cigars. Subsequently the tobacconist is now sending mail order all over Ireland as small shops find it difficult to sell unusual brands if they’re not on display. 

 

Tesco’s share price rose on the FTSE this week, after financial conglomerate Nomura estimated the retailer will "effectively create a new company" over the next five years, with sales of £27.3 billion. In a report from London, The Irish The Irish Times stated Cadbury had also beat forecasts with third-quarter revenue growth of 7% at constant exchange rates and raised its sales guidance for the full year.

 

 

 

 

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