Top stories in the papers this week 12 – 18 June 2010
Irish market leads decline as Musgrave profits fall 7%; XL goes from small to supersized in cut-price shopping; Decline in consumer spend on food ends
Print18 June 2010
1. Irish market leads decline as Musgrave profits fall 7%
Musgrave’s profits fell by 7% last year to €70 million, The Irish Times reports. While group sales declined by 3% to €4.5 billion on a constant currency basis, the biggest decline was felt in Ireland, where sales fell by 7% to €2.7 billion. Chief executive Chris Martin added there are indications of volume growth in Ireland but prices continue to decline. On a more positive note, Musgrave reduced its net debt to €59 million at the end of 2009 from €86.2 million a year earlier. The paper also outlines how the group experienced a more positive outcome in the UK and Northern Ireland.
2. XL goes from small to supersized in cut-price shopping
Retail chain XL is “unapologetic” about replacing Irish stock with cheaper UK imports, according to The Irish Independent. John Moane, wholesale manager at XL’s owner BWG, said delivering value was the primary demand of the group’s retailers, and XL therefore imported “anything that could profitably be brought in" over 2008 and 2009. He added shoppers were kept onside because XL was "very careful" to make sure that the products brought in were "very similarly branded" to the Irish versions.
The group hopes to boost its network of stores from its current total of 140 to 160 stores by the end of this year, with 200 on the books by the end of 2011.
3. Decline in consumer spend on food ends
Consumer spending on food grew last month for the first time following 17consecutive months of decline, the latest Nielsen figures show. The Irish Times reports that while the increase was just 0.5%; Nielsen Ireland MD Tom Harper believes further tentative signs of recovery could be seen in a levelling out of consumer confidence. However, Harper added consumers’ habit of searching for value would stay with them after the slump was over, and predicted the growth of discounters and popularity of own-label goods would continue.
4. Stay-at-home consumers push up sales of milk and dairy products
Consumer preferences for staying in rather than going out have helped sustain retail sales of milk and dairy products, speakers at the National Dairy Council (NDC) conference in Dublin said earlier this week. The Irish Times quotes NDC chief executive, Helen Brophy: "The recession has hit hard, but consumption of milk and dairy products like butter and cheese didn’t fall last year, and this trend is continuing this year. There has also been an upswing in the price of milk, so the mood is quite positive among dairy farmers right now,” she said.
5. Tesco UK sales hit by plunging food inflation
UK sales growth at Tesco ground almost to a halt in the last three months as the grocer wrestled with plunging food inflation. The supermarket giant said UK like-for-like sales excluding petrol rose 1.1% in the three months to May 30 – but, adjusting for this year’s higher rate of VAT sales – crawled just 0.1% higher. The firm added that sales stripping out petrol suffered because customers were paying around 30% more for fuel than a year ago and were subsequently shifting spending from other areas. Nevertheless, the Irish Examiner reports the UK number one still expects UK like-for-like sales growth of around 3% for the full year.
Also:
Sainsbury’s sales growth stutters (Irish Independent)
Advice for Tesco’s chief executive as he checks out for last time (Irish Times)
Some positive signs in retail figures (Retail Ireland, IBEC)
Retail sales up 6% in April (Irish Times)
Musgrave keen to expand in Spain (Irish Times)
Retail sector worst hit by recession, but ‘worst now over’; study (Irish Times)
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