In the papers this week 26 June – 3 July 2009

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Tesco prices cuts come to Dublin, while some reduced prices in the Drogheda store have gone back up, and C&C gives out golden hand shakes to former directors



3 July 2009

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Nine Tesco branches in Dublin have received the same price cuts that the company’s border stores implemented, The Irish Times reports. Tesco claims they have done very well in bringing border-crossing customers back to their stores and now wish to extend the reductions to Artane, Ashbourne, Balbriggan, Blanchardstown, Clarehall, Clearwater, Prussia Street, Santry, Jervis Street and Parnell Street.

Others are not seeing Tesco’s price drops anymore. The Irish Times investigated at the Drogheda branch and discovered that several items on the list of reduced products had gone up again in price, as much as 80 cents on some.

Tesco replied that although they called the campaign ‘change for good,’ in some stores the prices were continuing to be adjusted based on area competition. They also said that discrepancies between advertised prices and store prices may come down to typographical errors and increase in supplier charges. As such, while some costs have gone back up, there are nearly 300 items that continue to drop.

An Irish Times reader also reported unusual labels on Tesco’s price tags. She noticed that some products bearing the savings stickers were not mathematically correct. For instance, bundling four yoghurts for €3.50 instead of one for 79 cents would, according to the label, save 70 cents, but in fact customers would be paying 34 cents extra. Tesco said these were labelling typos.

As cheap as some of the deals may seem here, they are comparatively costlier than those in Northern Ireland, often up to 30% higher on food. The reasons, as reported by the Irish Times, are taxes, the cost of running a business, and consumers not bothering to shop around. The Competition Authority’s report recognises both the sterling-euro exchange rate and the efforts of retailers in the Republic to still drop prices, but suggests that if shoppers are not impressed that they should spread out their shopping list among several stores.

Spending, meanwhile, has come to an extraordinary deceleration in Ireland. From January to March, personal purchases dropped over 9%, and as this normally makes up two-thirds of national income, that comes to a loss of €5.5 billion. The Irish Independent attributes consumer cutbacks to unemployment, cut salaries, and higher income levies.

Morrisons will be opening its own farm in Scotland in order to conduct research in farming efficiency and sustainability, reports the Daily Telegraph (UK). The Morrisons Farm at Dumfries House in East Ayrshire, teamed up with the Scottish Agricultural College, will raise cattle and sheep, most likely to supply its own supermarkets. National Farmers’ Union Scotland’s president supports the farm as an example to follow, saying that Morrisons’s initiative “will help forge a sustainable future for our sector."

C&C, owner of Bulmers/Magners, has provided a severance package for each of its four former executive directors totalling €4.73 million, says the Irish Independent. Scottish & Newcastle replaced the former directors, including CEO Maurice Pratt, in 2008.  Compared to the previous year, total compensation rose €3.41 million. C&C chairman Tony O’Brien said there was a legal obligation to impart the golden handshakes.

Tesco’s proposed plan to open a hypermarket in Banbridge, Co. Down has instigated a local petition and campaign against the intrusion in the town’s centre, according to The Irish Times. While the site’s developers claim that the new store would provide 1,500 jobs and a £200 million investment increase, the Northern Ireland Independent Retail Trade Association has research suggesting it would actually “decimate Banbridge town centre.”


The Irish Farmers Association has likened supermarkets to ‘predators’ for the way they take advantage of local fruit and vegetable producers, reports the Fingal Independent. The IFA claimed that the supermarkets are not paying suppliers the true cost of their labour, which is much higher in the Republic than in Northern Ireland. The group requests government intervention to save local producers, lest the supermarket price war drive them all out of business.

In order to keep up with the other supermarkets, Dunnes Stores may get rid of thousands of low-selling products, says the Sunday Tribune. The company is reviewing its grocery numbers in order to give extra attention to the items that perform best, which tend to be discounted or private labels.

Marks & Spencer’s UK branches have seen a sales improvement, only dropping 1.4% compared to last year’s second quarter sales, reports the Sunday Business Post. Analysts had predicted sales would have dropped 2.5%, so executive chairman Stuart Rose attributes the pleasant surprise to consumer confidence. Although the company has seen improvement in several areas, it will remain vigilant about maintaining stability for the rest of the year.

Bausch & Lomb, producers of pharmaceutical eye care products, is looking for 120 voluntary redundancies in its Waterford factory, reports the Irish Times.  The cost savings are necessary due to reduced production costs thanks to sterling value.  Machines would replace the redundancies, which currently make up nearly 10% of the company’s staff, in order to maintain product output.



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