In the papers this week 19 – 25 Sept 2009

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Cadbury could be warming to a deal with Kraft; CSNA warns Oireachtas of a "rural wasteland" due to high wages; Love Irish Food campaign gathers momentum



25 September 2009

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Cadbury could be warming to a deal with Kraft, which would create the world’s largest confectioner, reports The Irish Independent.

Despite rejecting Kraft’s £10bn (€11bn) offer as too low, the British confectioner has detailed benefits from a takeover by Kraft and discussed valuations with investors. Chief executive Todd Stitzer admitted in a Bank of America/Merrill Lynch note that Kraft’s bid made "some strategic sense."

CSNA chief executive Vincent Jennings told an Oireachtas committee hearing this week that the futures of 40,000 people in the retail sector are uncertain. The Irish Times reports Jennings argued small shopkeepers should be allowed to pay new staff the minimum wage rather than 20% higher Joint Labour Committees (JLC) rates. Unsurprisingly, trade union SIPTU has criticised the proposal. Meanwhile, Minister for Enterprise, Trade and Employment Mary Coughlan, refused to attend the hearing, stating TDs should invite representatives of local enterprise committees instead.

Following the CSNA presentation, Labour TD Willie Penrose warned of an impending "rural wasteland" if small retailers are driven to the wall. RTE reported the Oireachtas committee chairman, whose family are involved in the retail trade, said there was a "myriad of strangulation and bureaucracy" at play and it was the Government’s intention to get rid of the small retailer. However he claimed reducing the minimum wage was not the solution, as this would drive workers into a poverty trap.

Retail Ireland has said it expects 12,000 more job losses within the retail sector by December this year. The Irish Examiner reports its announcement followed the publishing of Central Statistics Office (CSO) earlier this week, which showed 29,000 people who worked in retailing joined the Live Register betweeen mid-2008 and the middle of this year.

In the north meanwhile, Sainsbury’s has created almost 200 jobs at supermarkets in Carrickfergus and Belfast. The Irish Times outlined how recruitment of 150 employees has already begun at the retailer’s new Carrickfergus store, due to open late in the year. What’s more, the west Belfast store which opened earlier this month is to recruit 40 extra staff because it has been trading beyond initial expectations, according to Sainsbury’s.

However, the Northern Ireland Independent Retail Trade Association (NIIRTA) has stated towns have lost jobs and established retailers because planning officials gave the go-ahead to large out-of-town shopping developments. NIIRTA therefore wants the Northern Ireland Executive to develop a new rates scheme that would levy higher rates on such developments. The Irish Times confirms over 12% of the estimated 53,000 people who are currently looking for work in the North previously worked in sales and customer service. And speaking at the North’s first major retail conference last week, Marks & Spencer chairman Stuart Rose reiterated "there are absolutely no green shoots" on the horizon.

The Love Irish Food campaign is gaining momentum, its promoters have told The Irish Times. A further 11 indigenous companies have joined the campaign since it was launched three weeks ago, meaning it now represents 46 Irish brands in total. With its television campaign which uses the slogan ‘One more makes all the difference’ starting this week, chairman Jim Power unveiled research showing two-thirds of females prefer to shop in supermarkets that sell Irish brands. Furthermore, 86% of people believed buying Irish could assist economic recovery.

Savills has announced 15 October will be the official opening date for the only major new shopping centre planned this year, the Showgrounds in Clonmel, Co Tipperary. The Sunday Business Post reports the 11,000 sq m centre, located within a 40 minute drive of 240,000 potential customers, has already filled 25 out of 32 retail units, while a further two retailers signed up last week. Anchor tenant Marks & Spencer and Irish wine retailer Fine Wines both opened ahead of schedule and are reported to be trading well.

Petrol stations which were closed and sold to developers for millions of euro at the height of the property boom are now being reopened to sell petrol once more, according to The Sunday Business Post. Instead of becoming the new des-res for luxury appartment blocks, closed forecourts such as the Shell garage on Dublin’s Merrion Road, which was sold for €16 million in 2006, have now reopened. While several sites could not obtain planning permission for appartments, Topaz nevertheless managed to recoup at least €80 million by selling filling stations for property development.

Almost 90% of consumers have reduced their spending on non-essential items in the past year, claims a new survey by consumer website The Sunday Business Post revealed the research found 87% of respondents had reduced the frequency of at least one of the survey’s listed activities such as playing the Lotto, buying new clothes, eating out, drinking alcohol, and buying takeaway coffee. More than one-third had cut their spending on half of these activities

Treasury Holdings is hoping to start construction on its new €400m ‘Spring Cross’ shopping and leisure complex, in Ballymun, Dublin, by the end of next year. Director of development Niall Kavanagh told The Sunday Tribune he expects the development to be completed in nine or 10 phases, while a metro north station will be built in the basement of the centre which is close to Ikea, the M50 and Dublin airport

The Barry Group has reported a 4% increase in sales to €212.5m for the financial year to January 2009, while overall profit before tax rose to €2.67m. In a press statement posted on, the company which supplies product to over 700 stores including 230 affiliated stores in the Republic of Ireland operating under the Costcutter and Quikpick brands, attributed its success to "the continuing execution of our retail strategy which focuses on growth and customer experience, as well as our ability to offer grocery product at competitive prices to our customers."

Grafton Street has experienced the biggest fall in value within the world’s top 10 most expensive shopping streets – with rents tumbling 22.5% in a year. Although Dublin’s prime shopping mecca entered the the top five most expensive streets for the first time last year, The Irish Examiner has reported that it has now dropped into eighth position  

More than 2,600 Fingal businesses, predominantly in the retail sector, will face increased accumulative rates totalling approximately € 13 million. County manager David O’Connor told the Irish Independent he was extremely concerned about the impact  increases introduced under a regional re-evaluation process, could have on already-stretched rate-payers. What’s more, he estimated the process could actually cost the council at least €10 million in lost rates next year.

Lidl managed to secure some healthy PR in the Evening Herald this week. The discounter has pledged to donate a percentage of profits to The Irish Heart Foundation, giving 10% of profits for all fruit and vegetables purchases over €10 to the charity. The food giant stated it wanted to partner with an organisation which "promoted healthy eating" and is already linked with the Ulster Cancer Foundation in its Northern branches and the British Heart Foundation in England. While the retailer doesn’t "have a target goal" it is "optimistic for high figures."

The owners of Carroroe Retail Park in Sligo have called for changes to be made to the new Sligo Development Plan, or else it will risk collapse. The Sligo Weekender reports the retail park’s zoning is strictly limited to "bulky goods" uses, which has led to several closures within the park in recent months. The owners want different uses such as a discount food store to be allowed, as both Aldi and Lidl have expressed an interest in locations close to Carraroe.  

In the Irish Times’ look at the FTSE index this week, the paper reported that Tesco fell 1.6% after the Daily Telegraph reported that its retailing services chief executive Andrew Higginson warned of a flat Christmas at best for British retailers. Meanwhile, WM Morrison lost 1% and J Sainsbury fell 1.8%, although Marks and Spencer managed to find favour, rising 1.7% 





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