Profitability at Musgrave ‘back to normal’
THE head of Irish retail group Musgrave — which controls the SuperValu, Centra and Mace brands — says it has returned to “normalised” profitability following years of challenging economic conditions.
Chris Martin, chief executive of the Cork-based giant, said that the group is almost certain to continue focusing on the domestic and Spanish markets for growth in coming years, after ditching its loss-making Budgens and Londis operations in Britain in 2015.
Musgrave’s reported group turnover was flat at €3.7bn (£3.2bn) last year, but on a comparable and constant currency basis was 3.4% higher.
Group pre-tax profit, excluding a €15.5m (£13.6m) net pension gain after it closed its final defined benefit scheme last year, was €73m (£64m) compared to €38.1m (£33.4m) a year earlier from continuing operations.
The previous year’s figure also excluded pension gain of €14.7m (£13m).
Asked if Musgrave would ever have ambition to re-enter the British market, notwithstanding Brexit, Mr Martin said many global grocery retailers have been deciding to focus on their domestic markets.
“A lot of people are returning to their domestic markets saying that’s the real opportunity,” he said. “The reality is that Musgrave and its brands is absolutely playing to that. I see that there’s a real growth opportunity across the island of Ireland. We are looking to, where appropriate, go international.”
That wider international move is being spearheaded by the SuperValu marketplace, established by Musgrave on Alibaba’s Tmall retailing platform this year.
It is initially selling own-brand goods such as cereals, jams and tea and is primarily targeted at China-based shoppers.
Mr Martin said the experience so far had been “interesting”.
The Musgrave boss said Brexit posed a challenge, but that the Irish economy is now in a much stronger position than before.
“It’s creating uncertainty. For food, there are challenges. The reality of a hard Brexit will mean tariffs impacting on goods from the UK to Ireland,” he said.
“We want to protect the consumer as much as possible from any impact of tariffs.
“For home-grown products there’s an opportunity for suppliers to step in and service the Irish market. That shouldn’t be forgotten. It’s not all doom and gloom.”