Lockdown hit is a story of two halves, says Musgraves NI boss as restrictions set to ease
THE head of convenience retailer and wholesaler Musgrave NI has said an increase in some stores’ sales has not made up for a fall in other parts of the business since the start of lockdown.
The Cork-based business owns nearly 300 stores in Northern Ireland, with Centra, SuperValu, Mace and Daybreak all in its portfolio.
Musgrave NI managing director Michael McCormack said many stores had experienced a rise in business, particularly those in housing estates and rural areas.
He added that across such stores the average transaction value had risen by between 25pc and 30pc per visit.
But he said others, such as Centra stores in Belfast city centre, had closed due to their usual footfall from office workers being cut off.
The food-service part of the business, which supplies hospitality businesses like restaurants and bars, had suffered, he said. As did parts of the business which supply alcohol – including Drinks Inc, the distributor Musgrave took over last year.
Mr McCormack told the ‘Belfast Telegraph’ that as the year goes on and restrictions are lifted, he believes hospitality sales will go up.
“It’s not clear how long will it take to get back to where it was but I think middle or end of next year,” he said.
Musgrave employs around 1,500 people in Northern Ireland.
It is one of the island’s biggest businesses, and reported sales of €3.9bn in 2018, with pre-tax profits of €85m. Out of that overall number, the company had sales of €0.1bn at its Mace stores.
In Northern Ireland, it has 96 Centras, 35 SuperValus, 88 Maces and 82 DayToday shops.
Mr McCormack was appointed managing director of Musgrave Wholesale Partners earlier this year but continues in his former role of Northern Ireland managing director for Musgrave, after the process of finding a successor was interrupted by the pandemic.
There has also been a push to keep staff and customers safe during the pandemic.
“We rolled perspex screens out across all our locations north and south. Management decided it was the right thing to do and we did that sooner than a lot of others,” said Mr McCormack.
“We looked at our opening hours, we brought in a lot of hand sanitiser and introduced social-distancing. We’ve probably spent about £300,000 (€339,477) at this stage but that’s going to grow as you need to keep people safe and you’ll need to continue buying sanitiser.”
But that rush to fill cupboards at the start of the pandemic hasn’t offset the losses elsewhere.
“We have our cash and carry business, Marketplace, supplying retailers and food-service – that’s been severely impacted,” he said.
Drinks Inc services the on-trade market of pubs and restaurants, as well as the independent off-trade market.
“What we’re seeing is a rise in sales to off-licences but that doesn’t compensate at all for loss of revenue into the on-trade business and obviously for the loss of revenue on food service with restaurants and hotels closed, though we would still have public sector business and nursing homes.
“In the context of our alcohol distribution turnover, we’re seen the loss of over half of that turnover.”
He sums it up as “a story of two halves”.
“SuperValu and Centra food market stores are seeing significant sales uplifts in rural towns or housing estates. But if you then go to Centras or Mace stores on transient routes, they’re being hugely affected. No-one is travelling, there are no fuel sales and deli operations have had to close,” he said.
“So they’ve been severely impacted. And a number of city centre stores are closed. The future for those stores depends on how the restrictions are removed.
“Our city centre stores rely on people being in offices, so only when there’s people back to work in the city centre will it be viable for those to reopen.”
In his own business, he says that home working has worked successfully among the office-based colleagues.
“In the long term, does that mean will people in offices work differently? Probably, yes, even in next six months we don’t see everyone coming back to the office, purely because we have to implement social distancing and it will be a changed process,” said Mr McCormack.
“Further down the line, the focus will be on working with retailers in city centres and making sure when they reopen that they can attract customers and trade in a way that takes account of what’s going on in terms of Covid.”
‘Our city centre stores rely on people being in offices, only when they’re back will it be viable for those to reopen’