In the papers this week 23 – 29 Jan 2010

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Asda trials deliveries in ROI; Dunnes Stores disputes tax bill for plastic bag levy in High Court; Dunnes gives Love Irish Food 'the cold shoulder'

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28 January 2010

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Asda has begun trialling a groceries home delivery service in the Republic of Ireland, according to The Sunday Tribune. The trial is understood to involve a small number of customers, and extends at least as far as Dublin. However a spokesperson for the UK supermarket denied the claim, noting “our website actually won’t allow deliveries to ROI addresses.” Meanwhile, research from TNS Worldpanel shows Asda and Sainsbury’s had a 3% share of the Republic’s grocery market for the last quarter of 2009, up from 2.2% the previous year.

Dunnes Stores has claimed the Revenue Commissioners miscalculated its recent tax assessments owed for the plastic bag levy. The Irish Times reports the supermarket has now secured leave from the High Court to dispute a tax bill of €36.4 million for uncollected and due payments arising from the levy. According to Dunnes, the levy applies to larger bags given to customers at point of sale to hold their shopping but the Revenue Commissioner’s assessments wrongly include other bags used for wrapping or hygiene purposes.

The high-profile Love Irish Food campaign has not yet received the support of Dunnes Stores and Supervalu. The Irish Times reports whilst Dunnes was expected to come onboard this year, it has now allegedly given the campaign “the cold shoulder”. Musgrave meanwhile “hasn’t opted in or out” of in-store promotional activity, although a meeting is planned shortly between both parties. According to the paper’s Paul Cullen, some retailers have expressed private reservations about the campaign, yet a spokesperson said all its objectives had been achieved.

The Sunday Tribune examines the performance of Ireland’s supermarkets over the Christmas period. David Berry of TNS Worldpanel writes that the 12-week period to 27 December saw the value of the grocery market drop by 6% to €2.1 billion. Among the major retailers, the only growth in sales when compared to 2008 came from the German discounters Aldi and Lidl, with a 6% increase moving their market share from 7.3% up to 8.3%. Tesco maintained its number-one position in the grocery market with a clear lead over second-placed Dunnes Stores of almost three percentage points. And while SuperValu outperformed the market, Superquinn “struggled.”

Shoplifting is costing Irish supermarkets an estimated €150 million a year and pushing prices up for consumers, reports The Irish Times. Globally, the retail industry loses an estimated $278 million each year – or 1.65% of turnover – because of “shrinkage”, defined as internal and external theft and stock mismanagement, according to Adrian Beck, a criminologist at the University of Leicester. Speaking at the annual conference of Efficient Consumer Response (ECR) Ireland, Beck said retailers tended to blame the problem on external theft, when this actually accounted for only one-third of the Irish shrinkage cost of €450 million.

Nearly half of consumers intend buying more Irish-made goods this year, according to a Behaviour and Attitudes study presented at the annual ECR conference. The Irish Examiner reveals that last year householders increased the number of shopping trips they made each week, with a quarter of shoppers visiting three or more shops. Delegates also heard that 36% of shoppers expected to buy less convenience food and that over the past year, and they had bought "significantly" more fresh food, as well as eating out less.

Italy’s Ferrero has ruled out a rival bid for Cadbury, clearing the way for Kraft Foods to complete its £11.7 billion proposed takeover of the British confectioner. The Irish Independent reports that fellow chocolate maker Hershey confirmed on Friday that it had no intention of bidding for Cadbury. The paper therefore anticipates that with Nestlé already ruled out, Kraft appears on course to complete its recommended bid by the deadline of 2 February.

New EU regulations are set to come into force over the next two years which will set maximum upper limits for the dosages of vitamins and minerals contained in food supplements. Speaking to the Irish Times, Dr Robert Verkerk, executive scientific director of the UK-based Alliance for Natural Health, said the new legislation will mean Irish consumers no longer have access to the wide range of products currently available in health food stores – availability will be limited to approved products that can be found only in pharmacies and supermarkets. He claims this will only benefit giants such as Unilever that can afford to pay for widescale studies and have products like Benecol and Flora Proactive approved.

The Irish Times follows Cork milkman Tony O’Mahony on his rounds to examines whether milkmen are back in vogue, as dairies such as Glanbia would have us believe. In 1978, 65% of all milk consumed in Ireland was delivered to doorsteps, however that figure had declined to 5.6% by last year. Nevertheless, milk is still delivered to about 70,000 homes in Ireland every week. A spokesperson for Glanbia said doorstep deliveries “have seen a revival in the past couple of years” – following “a trend whereby consumers want to be part of real communities that offer a sense of belonging.”

Retail sales continued to plunge in the last three months of 2009 but the industry is expecting a pick-up later this year, according to The Irish Examiner. Despite a highly publicised supermarket price-war grocery sales were down almost 11% in the final quarter of 2009 compared with the same period in 2008. Retail Excellence Ireland also noted rent cost as a percentage of sales was almost 10%, running 27% higher than the same period in 2008 and 41% higher than Q4 2007.

The Irish Independent reports a property fund with three Superquinn sites as main assets has breached its loan agreements, forcing it into negotiations with its lender to restructure its debt. The Corinthian Irish Retail Portfolio, owns Superquinn sites in Walkinstown and Finglas, Dublin and in Bray, Co Wicklow. The sites which were purchased at the peak of the market, in mid-2007, have since fallen in value by about 46%. However O’Neill said the situation with the fund was different to that of development land as the Superquinn sites were producing income and there were no indications of problems from Superquinn.

Significant job losses are inevitable across the retail sector in the next few months, Retail Excellence Ireland has predicted in the Sunday Independent. The paper reports more than 170 jobs lost at Debenhams across its 11 Irish stores “is just the first of significant redundancies across the sector”. The reintroduction of the controversial ‘bus gate’ corridor in the evening that means only buses, taxis and cyclists are allowed to travel through College Green in the city centre during rush hour, is also allegedly having a negative impact on retail sales – with limited numbers of people using the new Samuel Beckett Bridge.

 

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