Preparing for new names but still lamenting old obstacles
Gillian Hamill takes a look at the major news stories affecting the grocery sector this month
Print14 August 2013
Major announcements in Ireland’s grocery sector are a little like buses: You wait for one to arrive (although not exactly whilst twiddling our thumbs I might add!) and then two arrive at once.
I am of course referring to the news that Ireland’s 24 Superquinn stores will change name to SuperValu by February of next year.
Naturally, the forthcoming extinction of the Superquinn name – over the shop door at any rate and not, rest assured, the sausages! – has created nostalgic reflections of a halcyon age of grocery retailing when Feargal Quinn reigned supreme, but ultimately the customer was always king.
This hankering for a touch of class unsullied by any nasty recession business – was shown by the outpourings of admiration for the legendary Superquinn sausages that erupted on Twitter shortly after the news broke.
Naturally and quite rightly, SuperValu was keen to assure patrons that their favourite products including Superquinn sausages, steaks, wraps, donuts and Sean’s Brown Bread – to name but a few – would all firmly stay put on the supermarket’s shelves.
Chris Martin, Musgrave Group CEO said the move will deliver an "unrivalled Irish retail brand". Indeed, SuperValu has now eclipsed Dunnes as the nation’s second largest multiple. According to the latest Kantar Worldpanel figures; when SuperValu (19.5% market share) and Superquinn (5.4%) are added to reach 24.9%, they comfortably pass out Dunnes Stores (at 21.5%) and are coming ever closer to standing on the toes of Tesco (27.6%).
The market shares of the country’s convenience stores are not included in Kantar’s data. However, were Musgrave’s 465 Centra stores in the Republic added to the mix, it would be surprising if Tesco’s position as top dog was not under threat. Ladies and gentlemen: We have (an indigenous Irish) winner: Musgrave take a bow.
But showing that complacency will never be an option for any grocery operator in this country any time soon, Marks and Spencer also had a significant announcement to make this month.
‘Strategic review’ at M&S
Four M&S stores are to close in the coming weeks, including two Simply Food branches, resulting in 180 redundancies. Acting as a cushion to this blow, the group also revealed a new flagship M&S store is due to open in Limerick in 2016 and the company’s remaining portfolio will also be invested in over the coming year.
When ShelfLife interviewed Martin Carpenter, manager of the M&S Mary Street store in Dublin city centre earlier this year, he pointed out that a perception exists among the general public that the M&S food offering is more expensive, but that this is not justified by the facts. "Actually when you start looking at our range, there is real value out there," he argued.
Could it be that the middle class, quality perception of the group – which opened so many doors for it (literally!) in the past, proved to be the chain’s downfall in recession-mired Ireland? Then again, with a new survey by the National Consumer Agency finding that 80% of shoppers say they are buying cheaper products, but "not products of lower quality," perhaps M&S’ "strategic review" will pay off, with locations no doubt chosen considerably more judiciously during the current recessionary climate.
And with Ireland’s grocery operators trying out new things at the moment, the leading FMCG trade publication is doing likewise. Our new ‘Have your say’ feature (page 34) explores consumers’ thoughts on in-store mobile communications, while on page 36, off-licence retailer Peter Foley responds to Dublin City Council’s decision to include off-licences on a list of premises banned from opening on the city’s premier shopping street.
But although we’re exploring new issues, we can’t afford to ignore old bugbears. I refer back to the October 2007 issue of ShelfLife, when the then editor Stephen Conmy, highlighted the industry’s concerns over the planned ban of tobacco products at a store’s point of sale.
"Anyone over the age of 18 in Ireland is free to smoke, so why are cigarettes being driven under the counter?" asked Conmy. "Is it an attempt by the authorities to ‘blacklist’ them once and for all, turn them into illicit, anti-social, shameful things?"
Will plain packaging proceed?
He promptly concludes that yes is the answer. And in 2013, the government has now upped the ante considerably. Health Minister James Reilly has revealed his plans to make Ireland ‘smoke-free’ by 2025. The plan, based on a document called ‘Tobacco-Free Ireland’ aims to reduce the proportion of the population who smoke to just 5%.
In the UK meanwhile, tobacco retailers dodged a bullet when Prime Minister David Cameron backed away from a commitment to introduce plain packaging.
On our home turf, Reilly won’t be so easily swayed. Undoubtedly this is a cause he feels passionately about, having revealed in May that he lost his own brother and his father to smoking-related diseases.
But while his aims are laudable, are they actually working? Or are they merely further playing into the hands of Ireland’s burgeoning illicit trade?
Irish statistics would seem to show that so far, the government’s anti-smoking measures simply haven’t worked. A report released by the Irish Cancer Society in January revealed that Ireland’s smoking rate remains "stubbornly" high at 29%.
Consumers are clearly continuing to buy cigarettes, but unfortunately for the Exchequer, less of them are now duty-paid.
ShelfLife received a letter from a reliable source this month, which is addressed to the Taoiseach from a collection of prominent US business organisations.
It highlights their "serious concern that the cabinet has decided to advance towards legislation mandating the "plain packaging" of tobacco products." The US businesses claim: "There is no clarity that plain packaging is effective in accomplishing the stated goal. Furthermore there is the significant prospect of unintended consequences, including increased illicit trade."
We can only hope that the Taoiseach carefully reflects on the arguments put forward by these US heavyweights.
Needless to say, during this time of increased scrutiny on the tobacco sector, it is more imperative than ever that legitimate tobacco retailers operate extreme scrutiny in ensuring minors are never served tobacco products. Now is the time to stub out inconsistent practice among all staff members.
Gillian Hamill,
Acting editor,
ShelfLife magazine
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