AFTER BEN DUNNE opened Ireland’s first out-of-town supermarket, at Cornelscourt in south Dublin in 1966, he used to drive up from his Cork home every Saturday and park outside the entrance to marvel at the numbers going through the doors in search of the better value that he claimed beat them all.
Try as he might, Dunne snr could never quite get his head around how so many people seemed so attracted to something as simple as a shop on a Saturday.
We have come a long way, as consumers, since Dunne’s day. Now 155 shops, 116 of them in Ireland, bear his family name and serve hundreds of thousands of people thousands of products worth tens of millions of euro every week. While Irish shopping habits have changed and become, arguably, more refined, Ben Dunne jnr believes everything still comes down to one thing: price.
Following a well-documented rift with his siblings, Dunne has been on the sidelines of the grocery sector for nearly 20 years, but he l retains a passion for it and has total recall of every triumph and slight. “The 1960s and 1970s were great for consumers but even better for us. We were able to undercut the bejaysus out of our rivals. They could never match our prices. When I took over, I was a very aggressive retailer.”
He was behind Ireland’s bread-and-butter wars of the early 1980s. He found bakers who could bake him a loaf for 19p so he could sell it for 29p, well below the 55p that branded products cost. “Then Ray Burke rang me and told me to stop selling cheap bread because I was killing the country’s bakeries. He wanted us to prop up inefficient producers. ” That perceived affront still rankles.
Dunnes wasn’t the only game in town, nor the first. In 1959, 30 years after the first stack-’em-high, sell-’em-cheap supermarkets opened in the US, H Williams opened on Henry Street in Dublin. A year later Feargal Quinn opened his first Superquinn, in Drogheda.
Mattie Melia brought the Mace brand to Ireland at around the same time. His granddaughter Laura McGann is making a documentary about the early days of the Irish supermarket. Called The End of the Counter, her programme, which will be screened at Cork Film Festival this month, relies heavily on her grandfather’s Super-8 footage. The clips are soundless but his images are no less fascinating for that.
The footage shows young men dressed like extras from Mad Men wandering the cramped aisles of Ireland’s rural supermarkets and rubbing shoulders with young women dressed like Jackie Kennedy while their fathers and mothers shuffle past, looking bemused as they put Vim and Zip in their baskets.
“Mattie saw what was happening in England; local family-run shops were going out of business because they could not compete with the big supermarkets that were coming in. He knew that sooner or later this would happen in Ireland,” McGann says. “And he knew that hundreds of families around the country would lose their livelihoods to the corporations.”
Melia was on the money.
Today, Irish supermarkets are all about corporations. Big overseas names exploit the huge profits to be made on what international retailing circles refer to as Treasure Island, because the margins here are so high. How high is hard to say, as our supermarkets are notoriously secretive. Typically, a British supermarket makes profits of between 1.5 and 4 per cent; in Ireland, a leak from Tesco a couple of years ago showed that margin reaching 7.2 per cent.
And Tesco is the kingpin. The latest data from Kantar Worldpanel, which monitors Irish grocery habits, shows it increasing its market share to 28.6 per cent, from 27.8 per cent a year ago. Aldi’s performance is more impressive: its share of the grocery pie has increased by 30 per cent year on year. It now has 6 per cent; its main rival, Lidl, has 6.6 per cent. Dunnes has 21.6 per cent and Musgrave, which controls SuperValu and Superquinn, has just over 25 per cent. Other retail players, including Centra, Spar and Marks Spencer, make up 12.1 per cent of the market.
There is less room for the little man now, particularly when consumers’ money is so tight. According to David Berry, the commercial director of Kantar Worldpanel, Irish shoppers are keeping close control on their spending and are shopping more often for fewer items.
Irish consumers are also eschewing brands. For generations shoppers have displayed a loyalty to brands that our thrifty cousins in central Europe find baffling. In Germany, private-label (or own-brand) products make up more than 70 per cent of the average shopping basket.
Own-brand products have been a hard sell here, largely for historical reasons. In the early 1980s, Quinnsworth rolled out a “yellow pack” range of own-brand groceries. The quality was poor and the term “yellow pack” quickly became pejorative, and a euphemism for poor-quality jobs, products and lifestyles.
The bursting of the economic bubble changed all that, and Irish consumers are buying far more own-brand products. In 2005 just 9 per cent of what we bought was own brand. This year it will make up nearly 40 per cent of the average shop.
The big winners have been the German discount chains, which have increased their business from nothing to more than 12 per cent of the market in little more than a decade. When they opened, people went to marvel at the eclectic mix of unfamiliar own-brand foods sitting alongside the blowtorches, wetsuits and wheelchairs. The all-over-the-shop displays raised chuckles as we made our way to the tills with packets of exotic German ham.
WITH SO MANYpeople's disposable income shrinking drastically, we are a lot less picky about where we buy groceries or what we buy. It is not only about the money. The German discounters deserve credit for they way they have nurtured relationships with some of the best artisan producers in the State, and much of the stock both sell is excellent.
Dunne believes the reason Aldi and Lidl are performing so well is that they never forgot the 80/20 rule of retailing: 80 per cent of sales come from 20 per cent of the products. “They stock the basics and cut the daylights out of them. When the Celtic Tiger was around people would not shop in Aldi or Lidl . . . You don’t hear that so much any more,” he says.
Irish people are shopping more online, and analysts predict a 400 per cent increase in this over the next five years as retailers develop smarter apps and slicker websites.
“Over the next five years the grocery sector will change rapidly,” Dunne believes. “Soon 80 per cent of a person’s shop will be done online with the rest sourced in local butchers and vegetable shops. All it will take is one big warehouse stocked with groceries that sell for 20 per cent less than Tesco. If Tesco started selling online at 10 per cent less than in store, it would go out of business overnight.”
For the online revolution to really take hold in the grocery sector, Dunne believes someone with money needs to join the dots. “If I was a young man I would be doing it in a flash. Why bother with shops with expensive displays and staff kitted out in uniforms and high-cost refrigeration display units? The current retail model is the most expensive way of doing it.”
Tesco disagrees and is putting its money where its mouth is. It is building ever bigger stores that are selling more and more stock. Its Extra outlets sell toys, hardware, electronics, prescription drugs, clothes, groceries, alcohol, books, furniture and more besides. Such a big Tesco will have more than 12,000 products under one roof.
This hypermarket model may see prices fall, as the troika hoped when it called on the Government to lift restrictions on retailers' floorspace. But perhaps it won't. Perhaps Dunne is right and supermarkets are a doomed anachronistic throwback to a time when retailers would sit quietly outside their shops just watching us spend money. Conor Pope
The word in the aisle ‘Now I just get what I need’
Tesco Extra
NAAS, CO KILDARE
With almost 11,000 sq m (118,400 sq ft) of floor space, Tesco Extra in Monread Shopping Centre is one of the largest supermarkets in the country. Open 24 hours, it sells everything from clothing to toys, books and electrical items, and has free parking for its customers, who drive from all over Co Kildare.
PATRICK McDONALDis 63 and works for a cheese-marketing company in Dublin. He is shopping for his wife and their two daughters, who are 25 and 34.
“I live around the corner, so I would pop in here most days. I have a shopping list, which keeps me focused. Previously I would have come in to buy €20 worth of things and ended up spending €60, putting more things in the trolley as I wandered around. Now I just get what I need.
“I have a job, and my wife and two daughters are working, but we all find it much tougher than we used to. I work in Dublin, and it is much more expensive going up and down to work because the price of petrol has gone up so much. We spend about €120 a week on groceries for the family, but that has come down a lot. The amount of food we used to throw out was unbelievable.
“I’m a bit stuck in my ways when it comes to brands. Everything here in my trolley today is branded. The sausages, rashers, bread and tea haven’t changed much over the years. For buying chicken and beef, I would look out for the special offers. There’s good value to be had. Tea was two for the price of one today, so I bought two boxes. It won’t go off.”
ROB TEAGUE, a 34-year-old medical engineer, is shopping with his two sons: Jack, who is four, and one-year-old Oliver. They live 15km away.
“We usually come here because it is the easiest for us. We can park the car and it is reasonable. We do one big shop for the week.
“We got into cooking in a big way about four years ago. We are both much healthier since the kids were born. We cook everything from scratch ourselves because it is better for them. There’s a lot of sugar and salt and additives in prepacked foods.
“We sometimes buy things like toys here; if there was a birthday coming up, we’d throw it in with the shopping.
“We spend quite a lot on the weekly shop. It is expensive to feed a family, and buy nappies and other things the kids need. But both of us are still working, thank God.
“We shop around for good value and look out for the bargains. I buy Irish products where I can, but sometimes it can be more expensive. But it is important to try to keep everyone else at work. We can all do our bit to help.”
RUTH HUMPHREYS, a graphic designer who is 44, and JOHN HUMPHREYS, a 42-year-old creative-services manager, live near Sallins with their nine-year-old daughter and 13-year-old son.
“We usually shop online, but we have just moved into a new house and haven’t got our broadband set up yet. We lived in San Francisco for a few years, where online shopping is very popular,” says John.
Ruth says, “We look out for more deals now, which is easier to do online because you can compare prices. You don’t buy as much junk either, and you don’t have to spend hours going to the supermarket.
“During the week we cook at home every night, but the odd time at weekends we would have a meal out, for Sunday lunch or something. We are definitely eating out less and ordering less takeaway. It is expensive to order a dinner for four people.”
John says, “Our new home is a good distance from the village, so it isn’t as as easy to get pizzas and takeaways delivered. A lot of the restaurants around here have closed recently too.
“It is important to support local businesses, so we’d buy a few things in the smaller shops in Sallins sometimes. They sell absolutely everything in this Tesco, so you often find yourself buying stationery or electrical items with your food shop. I got my hair cut today too.”
Eurospar
BARROW STREET, DUBLIN 4
Eurospar’s flagship store, which is beside Grand Canal Dock Dart station, has a noodle bar, a deli, an off-licence, an Insomnia coffee shop, a butchery and a post office. Customers range from young Google and Facebook staff stopping for breakfast on the way to the office to local pensioners doing their weekly shop.
LARS ZELANDERis 28 and is an account strategist for a technology company. He is from Denmark but has been living in Ireland for almost two years.
“Our lunches are provided in the office, so I shop here only for small things, such as cigarettes, or to use the post office. I shop in the Tesco near where I live for food, or in Fallon & Byrne if I’m going all out.
“In Ireland there are more delis than in Denmark; there are more options to buy readymade or microwave food. It makes things very easy. If you finish work late you can pick up a dinner that you can make quickly. Tesco and Marks & Spencer do good meal deals, with dinner, dessert and wine for about €12. They are very good value.
“I was surprised when I came here that the prices were roughly the same as in Denmark, because groceries are very expensive there. I was expecting Ireland to be cheaper.
“I miss Danish products such as rye bread. They sell some things in Ikea, so when I’m going out to buy something there I sometimes stop by the food section.”
SUSANNE O'BRIENis 47 and lives in Ringsend with her husband and 17-year-old son.
“I’m in here nearly every day, because I live around the corner. It is a local store, and all the staff are very friendly. I know them to see because I am in and out so often. I do a big shop every two weeks in Tesco because buying in bulk there is cheaper, but I buy day-to-day things like bread and milk here.
“I look out for more special offers and am more aware of what I’m spending. You have to be, the way things are now. I used to work in childcare, but I haven’t worked for about four years. I am a stay-at-home mother now.
“I cook every day. I’d buy frozen pizzas the odd time but no other ready meals. We used to go out on a Sunday for dinner, but that’s all stopped. People can’t afford to eat out any more. I spend a lot on groceries, even though there’s only three of us. I always end up coming out with more than I went in for.”
BRIAN BYRNE, who is 29, is studying international relations at DCU. He lives in Ringsend with his partner.
“ I am a mature student living day to day at the moment, so I shop regularly but for just a few things. I was working before I went back to college, so my finances have changed hugely. The student grant was slashed last year which has made a big difference.
"I cook at home a lot more now than I used to, because of cookery programmes and websites such as bbc.co.uk/food, and because it is cheaper. We can't really afford to eat out. We go out for a meal together about once a month, much less often than we used to."
ROBERT DORANis 27 and is a digital producer for a marketing company. He lives in Swords.
“I was at a meeting in an office around the corner and stopped in to the shop before I jump on the train home. I bought the ingredients for spaghetti Bolognese. I live with a few other guys and we share the cooking; it’s my turn tonight.
“I pick up something on the way into work for breakfast and eat out for lunch most days, so I don’t buy a lot of food in the supermarket. If there’s a good special offer on I buy in bulk and freeze some of it. Shops like this do good offers on boxes of beer, so I come in for them and buy a few other things while I’m here.
"My own finances haven't changed that much, but I am more aware of what I'm spending because money is tight for a lot of people at the moment. Food is one of my main expenses, along with rent, and petrol and insurance for my car." Ciara Kenny
Lidl
RATHMINES, DUBLIN 6
This small and busy branch of Lidl stocks discount clothing, household items, plants and fresh baked goods. It attracts a diverse range of students, singles and families living in Dublin 2 and Dublin 6, and its rivals include Aldi across the street as well as Dunnes, Tesco, two Polish shops, an Asian shop and a Spar, all on Lower Rathmines Road.
LUKASZ ADAMIKA, a 27-year-old chef from Poland, has lived in Dublin for two years.
“I shop in Lidl because I like the produce. They have things such as muesli and cottage cheese that other supermarkets don’t have, and everything is cheaper. Their fruits and vegetables are very good.
“I go sometimes to the Polish shops to buy yogurts and meats, but I lived in the US for a few years, so I am used to not eating Polish food.
“I spend very little money on food, about €20 a week, because I eat most days in the restaurant where I work. I cook for myself only about once a week, or if I have friends coming over. I buy my meat in the butcher’s rather than here, because you can trust the person behind the counter to tell you if it is fresh. That is the chef in me.
I have come to this Lidl for two years, so I know some of the staff. Two or three of them are Polish. I buy only food here, because I tried a snowboard jacket once and it wasn’t very good.
CATRIONA REID, a retired linguist, is 59. She is shopping with her 26-year-old daughter, Cliona, who is on a visit home from New York, where she works as an interior architect.
“I have been shopping in Lidl for about a year. I kept hearing about how cheap it was, and once I started shopping here I realised how good the prices are and what an interesting selection of produce they have.
“They have different brands, which took a bit of getting used to, but we have come around to that. Their cold meats and cheeses are very good, and the bakery is great.
“We used to do one big shop a week, but you have to shop around these days if you want the best prices. I go up to Dunnes the odd time, and to Tesco, but I do most of the shopping in Lidl.
“My husband took the early-retirement package from the public service recently, which has made a difference [to our finances]. I don’t do these huge shops where I throw everything into the basket any more. I look more closely at what I am buying.”
MARION GEARY, who is 26, and CONOR KEOGH,who is 30, have just moved to Dublin from Limerick. Keogh works as an accountant and Geary is looking for a job in hairdressing.
“Groceries would be our biggest expenditure after rent,” says Keogh. “But we buy only what we are going to use, so I don’t think we could spend much less than we do. We have an eye out for value, but we wouldn’t just buy something because it is on special offer if we didn’t need it.”
“For some things I prefer to buy the big brands, such as Dolmio sauces, because they seem to have less salt and sugar in them,” says Geary. “They sell some things like that here. For most things, though, it wouldn’t bother me what brand it is.”
“That would would bother our parents more, I think,” says Keogh. “Older generations would be more inclined to buy what they know. My parents always shopped in Dunnes and nowhere else, but they are beginning to shop around a bit more now.”
SuperValu
GREYSTONES, CO WICKLOW
Located on the main street in the town, SuperValu is a small community supermarket that works hard to retain customer loyalty by sponsoring local events or offering food and wine tastings in store. Local rivals include Tesco and Lidl in Greystones, and Superquinn and Aldi in Bray.
SHARON REDMOND, who is 47, is shopping with her four-year-old daughter, Francesca. They live in Greystones with Sharon's husband and two other children, who are 12 and 17. "I normally do my big shop on a Thursday, so today I'm here just to pick up a few specials. The meal deals from the butcher's department are great value. They are attractively presented, easy to cook and quite healthy, because they are just fresh meat and vegetables with some herbs or lemon.
“I’m much more aware of value now. I think we all are. The mothers outside the school gate talk about the special offers available in the different supermarkets, and I follow up on them sometimes, for example if washing powder was reduced in Tesco. We are more thrifty with our shopping money, because things are tougher financially.
“Our family finances have definitely changed. I am a stay-at-home mom now, so it is much harder. I had to weigh up what I would have earned working as a hairdresser and paying for childcare with staying at home. The kids are all at school, which costs a lot, so we are pinching the pennies where we can. We live week to week, day to day.”
RICHARD WHEELER, who is 78, lives with his wife in Greystones. Both are retired.
“I shop in Supervalu because it is 100 yards from my house and the staff are always very pleasant. I have got to know a lot of them: some have been here 20 years. Today I’m here to buy shredded duck.
“I spent years buying things on eBay, but I would never buy food online. The supermarket is so close to my house, and I like to be able to see what I’m buying and pick up things as I come across them that I mightn’t have thought of. My wife gets food delivered sometimes, but I like to come down, because I can go to the chemist or other shops in the town and stop and have a chat with people.
“I am more careful with my money now. The pension doesn’t go as far as it used to. It hasn’t been reduced, but the amount isn’t worth as much. I would rarely buy special offers, though. I like to be able to make up my own mind about what I buy rather than deciding what to eat because it is cheap on a particular day. I always suspect they have the second-best stuff on special.
FIONA KEANE,who is 46, is a human-resources director. She is shopping for a family of five with her 10-year-old son, Cuan MacManus.
“I come here for bread and milk and the newspaper, and on Fridays I get takeaway sandwiches for the kids. Tesco, Superquinn and Lidl are all on the outskirts of town, so I shop in all three, depending on where I think the best offers are and what is most convenient.
“I like to buy organic when I can. I try to strike a balance between value and good-quality, healthy food. I shop in the Happy Pear for organic fruit and vegetables; it is more expensive than the supermarkets but worth it for the quality.
“I am probably one of the luckier ones, in that my husband and I are both still working. But as our outgoings increase and we become more concerned about providing for our family’s future, I am definitely more conscious of saving and good value now than I was before.”
