Musgrave calls for urgent financial supports for SME food retailers
8 August 2022
Musgrave is calling on the government to introduce a temporary financial support package for SME food retailers currently experiencing devastating energy price increases.
The package should include the introduction of an energy rate cap, the suspension of commercial rates, capital allowance super-deduction, VAT warehousing and the inclusion of food retailers in existing, and future, support schemes.
Such a package, according to Musgrave, is urgently needed to protect livelihoods and jobs in local communities and ensure food retailers and wholesalers, which provide Irish families with access to food and keep the food supply chain open and clean, can continue to operate.
Musgrave, which is Ireland’s leading food retail, wholesale, and foodservice company, works in partnership with local entrepreneurs, who own their own SuperValu and Centra stores in their local communities.
The average energy bill for a SuperValu and Centra is expected to treble, and in some cases quadruple from September since last year. Based on current outlook, the average Centra store will see energy bills rise from circa €50,000 in 2021 to up to as much as €200,000 in September 2022.
Musgrave is calling for the following temporary financial support package:
- The introduction of an energy price cap
- Rebate for food retailers when energy costs as a percentage of turnover increase over predefined thresholds.
- Temporary suspension of commercial rates
- VAT warehousing
- Capital Allowance Super-Deduction which would encourage retailers to continue to invest in their businesses through building development and the purchase of energy reducing technology.
- Include food retailers in existing, and future, support schemes including
- the government’s electricity credit for households and any similar future schemes
- the government’s €55 million ‘Green Transition’ fund to help businesses move away from fossil fuels. Food retailers are currently not eligible under the scheme.
“The current inflationary environment, coupled with soaring energy costs, has put our retail partners under pressure like never before,” said Ian Allen, MD of SuperValu and Centra. “Energy is the second highest bill, after labour, a store owner must meet and with sales volumes back on last year, the new crisis of rapidly surging energy costs is compounding the cost of doing business in a high volume and low margin sector. The average energy bill for a SuperValu and Centra will treble, and in some cases quadruple since last year. This is unsustainable. Without swift intervention, there will be structural changes to these family-owned local businesses and implications for their ability to sustain employment, continue to support sporting organisations, charities, and services in local communities and service debt.
“Food retail is very energy intensive given the perishable nature of the products we sell and the need to run heating, air conditioning, cold storage, fridges, and freezers 24 hours a day, seven days a week. We are asking Government to support the food retail industry, which employs thousands of people in communities across the country and ensures people have access to food locally.”
Ian Allen, MD of SuperValu and Centra added: “At Musgrave, we are acutely aware of the impact inflation is having on our shoppers and we are working hard to ensure we continue to deliver the best value and quality products. We have significantly increased our own brand alternatives this year.
“SuperValu currently has over 2,000 own brand products and we offer 2,000 promotions and offers across all product categories. We also work closely with our suppliers on an on-going basis to deliver options to help minimise the impact of inflation. We are doing everything we can for shoppers during these inflationary times, but independent food retailers also need support so they can continue to provide services, employment and support in their local communities.”