Musgrave to focus efforts on growth at home – CEO
MUSGRAVE, the Cork-based retail group that controls the SuperValu, Centra and Daybreak brands, has returned to “normalised” profitability following years of challenging economic conditions, according to CEO Chris Martin.
He said the group was almost certain to maintain its focus on the domestic and Spanish markets for growth in coming years, after ditching its loss-making British operations in 2015.
Musgrave’s reported group turnover was flat at €3.7bn last year, but on a comparable and constant-currency basis was 3.4pc higher. Group pre-tax profit, excluding a €15.5m net pension gain, after it closed its final defined benefit scheme last year, was €73m, compared to €38.1m a year earlier from continuing operations. The previous year’s figure also excluded pension gain of €14.7m.
Asked if Musgrave would ever have the ambition to re-enter the British market, notwithstanding Brexit, Mr Martin told the Irish Independent that 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 are absolutely playing to that.
“I see that there is a real growth opportunity across the island of Ireland. We are looking, where appropriate, to go international.”
That wider international move is being spearheaded by the SuperValu marketplace that Musgrave established on Alibaba’s Tmall retailing platform this year, initially selling ownbrand goods, such as cereals, jams, biscuits and tea.
It is primarily targeted at China-based shoppers.
Mr Martin said the experience so far had been “interesting”.
Brexit posed a challenge, he acknowledged, but the Irish economy was now in a much stronger position than before.
“It (Brexit) is creating uncertainty,” he said. “For food, there are challenges. The reality of a hard Brexit will mean tariffs and those tariffs will impact goods as they come from the UK to Ireland.
“We want to protect the consumer as much as possible from any impact of tariffs.
“For home-grown products, there is an opportunity for (Irish) suppliers to step in and service the Irish market. That shouldn’t be forgotten. “It’s not all doom and gloom.” Sales at SuperValu, Ireland’s biggest grocery retailer, rose 2.4pc to €2.67bn last year, while Centra sales were up 3pc at €1.59bn.
Chris Martin says the company will prioritise the Irish market