Ground Floor: Ireland's on-the-go lifestyle was clearly illustrated by the results that the Musgrave Group posted last month, writes Sheila O'Flanagan
While the abolition of the Groceries Order last year led to the usual discussions about the relentless march of the supermarkets, it's the symbol brand retailers that are carving out niches for themselves. Ireland is now home to Centra, Spar, Londis, Mace and others - all ready to help us shop at the times that suit us best.
Musgrave, which counts SuperValu and Centra as part of its stable, announced that turnover was up by 13 per cent, sales had risen 13 per cent and profits had grown by 16 per cent. At the end of 2004, there were 182 SuperValu and 353 Centra stores in Ireland and the group continues to add to those numbers. SuperValu is a supermarket, competing with Tesco and Dunnes, albeit at a smaller level, while the ubiquitous Centra stores are aimed entirely at the convenience market.
Musgrave isn't the only player in the sector making news. There is talk of a €300 million-plus price tag on the BWG Group, which is up for sale and has a network of around 900 stores, including the Spar and Mace franchises in the UK and Ireland. It's all go in convenience shopping!
In its annual report, Musgrave described the trading environment as "challenging", although it seems to me that it's currently akin to the "taking candy from a baby" scenario, given that every new housing development seems to feature a convenience store as part of it. In the spirit of the global Irish business, though, Musgrave is not limiting itself to corner shops in Dublin's ever-expanding commuter belt.
Having previously acquired Budgens in the UK , the company bought Londis GB in 2004, adding 2,000 stores to its portfolio as a result, and is currently involved in an expansion in Spain, where it has moved from being one of the main food distributors in the Valencia and Murcia regions through the Dialsur company to opening SuperValu stores.
The first Spanish SuperValu opened in 1999 and since then, it has been actively looking for sites and franchisees in new "urbanisations" with populations of more than 10,000 people. SuperValu now employs around 925 people in Spain and has grown sales by 4 per cent. Dialsur also owns another chain of convenience stores called Dialprix.
If you think that there are too many supermarkets and convenience stores in Ireland, you should take a wander around Valencia. Despite a slowing in the rate of new home building in the region, there are still plenty of new developments and plenty of people either retiring or keeping holiday homes who are potential customers. In the summer, all the supermarkets seem to get good business, but I can't help wondering how difficult it is during the winter months when the population around the costal areas suddenly shrinks.
But clearly, given Musgrave's more aggressive entry into this area, it feels that there's a sustainable market.
The main supermarkets operating in Spain are Carrefour (the French chain that took over Continiente) and Mercadona. Carrefour is like Tesco, only bigger - you can buy just about anything there - while Mercadona is somewhere between SuperValu and Superquinn. And then you have the various convenience stores.
Interestingly, for those who cry that the corner store is being killed off by all these branded retail outlets, there are still lots of flourishing speciality stores. There aren't, I agree, any independent general grocery stores, but there are plenty of independent fruit and vegetable stores as well as bakeries and fishmongers. (Perhaps it's because of the Mediterranean fish diet that there aren't many butchers. In fact, in the locality where I stay I haven't yet come across one.)
Anyway, I'm always pleased to see Irish businesses expand their profile in new territories and it will be interesting to see what the Spanish SuperValus bring to the profit line. I suppose that, although the retail environment in Ireland might not be as challenging as they make out - at least in terms of having plenty of willing customers - it is challenging in terms of brand loyalty, so expansion into other areas is an important part of company strategy.
According to Checkout Ireland magazine, increasing numbers of independent retailers are moving between symbol groups, which is why one day your local store is branded in red and white and the next has changed over to green and yellow or some other subliminally recognisable colour combination.
It seems that some independent retailers are now demanding better terms or increased freedom from the symbol they're with and are threatening to rebrand if the wholesalers don't agree; while wholesalers are interested in getting a foothold into the more lucrative proven sites rather than opening new stores in an out-of-town housing development and are therefore open to clients wishing to change affiliation.
I love the grocery retail sector! I love how, as consumers, we get ourselves worked up about the horrible supermarkets and the soul-less convenience stores while at the same time our lifestyles mean that these are the only viable options for us. Late-night shopping, all-night shopping, hot food (something hot in a sort-of baguette) on the go, water and wine on the same shelves these are the things that make us go back to them time and time again.
This is, I suppose, why that market continues to grow and not just in cash-rich, time-poor Ireland, but across Europe. The thing about symbol stores, like any retailing venture, is getting the location right. But once you've managed to do that, you really do have an almost captive audience.
And that is why it truly can be like taking candy from a baby.
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