In the papers this week 31 Oct – 6 Nov 2009
Tesco share static despite price cuts; ICSA warns of 'winter of discontent'; consumer confidence hits 18-month high; Irish consumers the 10th biggest spenders online
Print6 November 2009
Clarification printed in the Irish Independent
The Irish Independent has printed a clarification on a story it ran last week stating that Musgrave upped dividends paid to directors last year, despite falling sales and profits.
The dividend to which it referred relates to 2008 and was based on the company’s performance in 2007. It has since been reduced by 10%, and in addition, was shared out amongst 3,350 shareholders.
Despite introducing price-cuts, Tesco Ireland’s market share has remained static at 26.1%, according to TNS Worldpanel statistics. The Sunday Tribune reports that rival Dunnes Stores; in the courts last week challenging a demand by the Central Statistics Office to provide it with statistical information on its trade, has seen its share of the market fall from 23.8% to 23.2%. Superquinn, Supervalu and symbol groups’ share has also declined, while Aldi and Lidl are up from 7.5% to 8.7% in the third quarter, and private label sales have risen by nearly 9%.
The Irish Cattle and Sheep Farmers’ Association (ICSA) has warned supermarkets to expect a "winter of discontent". The Irish Independent reports that, speaking at a protest outside Tesco in Claremorris, ICSA Mayo chairman Cathal O’Reilly’s told supermarkets: "farmers can’t afford to feed you anymore". According to O’Reilly, farmers receive less than one third of the final retail price for beef and lamb and dairy farmers received 20c/l for milk which was being sold for up to €1.20/l.
Consumer confidence hit an 18-month high in October, according to the KBC/ESRI consumer sentiment index. A report in The Irish Examiner shows the index rose to 54.2 from 49.6 in September. This compares with a reading of 42 in October last year and to an all-time low of 39.6 reached in July 2008. Austin Hughes has said this pick-up in sentiment "should imply a slight improvement in consumer spending in the run-up to Christmas."
Irish consumers are the 10th biggest online spenders in the world, according to new research by onlineadvertising.ie. The Sunday Tribune reveals the busiest day for online shopping will fall on the first Sunday of December, just 18 days before Christmas. While 27% plan to buy Christmas presents online and 54% will research gifts over the web first, just 20% of shoppers won’t use the internet at all.
Marks & Spencer is set to start selling third party brands in all its UK stores in January following a 16-month trial. Chief executive Sir Stuart Rose has explained the decision to sell brands such as Marmite and Coca-Cola, stating: "It will be so much more for convenient for our customers to get what they need from M&S rather than having to go elsewhere."
Marks & Spencer’s workers are also on course to bag bonuses of £850 each after the high street giant beat its profit targets, according to The Mirror (UK). The chain’s 70,000 staff missed out this year after a 40% slump in profits. However bosses set aside £30m after half-year profits edged up to £298m, and chef executive Sir Stuart Rose promised the chain would double the cash in the kitty to £60m if the group hit its Christmas targets.
Shoppers heading north for bargains are putting significant pressure on tenants in retail parks in the border counties, new research by Retail Excellence Ireland (REI) shows. Out of 32 listed retail parks, only 13 were deemed profitable trading environments by tenants, while tenants in 19 centres said their businesses were loss-making.
Spar’s charity teddy bear dubbed "the Luv Bear," is set to raise €200,000 for the Turning The Tide of Suicide (3Ts) charity, after being recently designed and launched on popular TV3 programme, The Apprentice. The Sunday Business Post reports that thousands of the bears have been sold since the television show was broadcast last Monday.
Approximately 50,000 cigarettes were seized this week, as a result of a routine Garda checkpoint in Midleton, Co Cork. The Irish Examiner reports gardai became suspicious about the occupants of a car, and upon searching the vehicle uncovered cigarettes with a street value of approximately €20,000. Four Polish men were subsequently taken for questioning, following the raids which were part of an intelligence led operation codenamed Cue Ball.
Glanbia has managed to resolve a dispute with farmers over grain prices. The Irish Examiner reports that the Irish Farmers Association had staged a five-day protest outside grain mills in Portlaoise and Clonroche, Co Wexford, during which the company issued protective notices to 27 production employees. However Glanbia has now improved prices by €3.50 per tonne for feed barley and €2.00 per tonne for feed wheat. The IFA Dairy Committee board has also agreed with Glanbia’s decision to lift the September milk price by 2c/l.
Dundalk town has launched a Christmas campaign called ‘Nice One,’ in an attempt to entice shoppers to stay at home this year. According to town centre manager Andrew Mawhinney in local paper The Argus, the initiative aims to demonstrate "the great value for money" available in Dundalk. Shoppers are urged to take another look at the town’s offering and "see for themselves that they don’t have to travel miles in heavy traffic for their Christmas shopping."
From this Monday onwards, Unilever Ireland knocked an average of 11% off the price of household brands such as Flora, Dove and Surf. Speaking on the price-cut, managing director Conor Kilduff told The Irish Times: "We are doing all that we can to help our retail customers drive down prices and drive up sales volumes."
Longford County Council has granted planning permission for a second Aldi store on the outskirts of Longford town. However, The Longford Leader reports that the proposed development will reduce the overall gross floor area of the building from 2,854sq m to 1,543 sq m (1,141 sq metres net).
Living standards in Ireland are likely to remain permanently lower, the Organisation for Economic Co-operation and Development (OECD) has forecasted in a new report out this week. The Irish Times reports lower wages and cuts in social welfare will be necessary to restore economic stability, according to the report, which also urges barriers to competition in the retail trade be removed.
Two Dublin pharmacies affiliated to Ipos, the independent pharmacy ownership scheme, have collapsed, blaming high levels of debt and the impact of the Health Service Executive’s (HSE) decision to slash margins. The Sunday Business Post reports both Hamilton Long on O’Connell Street in Dublin and an Ipos community pharmacy in Ballymun in north Dublin have gone into liquidation after running up significant losses.
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