IN­TER­VIEW

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

ON Fri­day, March 2 JP Scally was at home deal­ing with the lo­gis­ti­cal night­mare brought about by the bliz­zards of Storm Emma. The shut­ters were down on shops across the Lidl group and even though plans were in place to re-open them as soon as pos­si­ble, get­ting goods in from sup­pli­ers and en­sur­ing staff could travel safely were among the chal­lenges be­ing worked out by the man­ag­ing di­rec­tor of Lidl Ireland.

The last thing Scally was ex­pect­ing was a call to say that a store in Dublin had been de­mol­ished by van­dals op­er­at­ing a JCB. He was tipped off a short time be­fore he could see the story go vi­ral on his so­cial me­dia feeds.

“It was im­pos­si­ble to get there that night, so I got out there the next day,” he says. “The most im­por­tant thing was that we met with all the staff of the store here on the Mon­day morn­ing as soon as things were get­ting back to nor­mal and then re­dis­tributed them to other stores lo­cally and try to ac­com­mo­date them as much as pos­si­ble dur­ing the clo­sure pe­riod,” says Scally.

“We had to re­as­sure them as well that we were go­ing to re­open their store for them. We’d made that de­ci­sion by the mid­dle of the fol­low­ing week, af­ter sur­vey­ing ev­ery­thing.”

It was a shock­ing event for Scally, but the com­pany was gen­er­ally judged to have han­dled the de­struc­tion of the shop in For­tunestown, Tal­laght well, ac­tu­ally man­ag­ing to turn it into a pos­i­tive for the brand.

Lidl is work­ing on fur­ther em­bed­ding it­self in the Ir­ish psy­che. Walk­ing around an­other Tal­laght store — this one be­side the Ger­man dis­counter’s Ir­ish head of­fice — Scally points out just how Ir­ish the busi­ness has be­come.

For ex­am­ple, the group now car­ries both Barry’s and Lyon’s Tea, as well as its much cheaper own brand.

It is part of a strat­egy to com­ple­ment Lidl’s sig­na­ture pared-back prod­uct line with the key Ir­ish brands that many Ir­ish shop­pers say they will not com­pro­mise on.

Scally be­lieves that in or­der for Ir­ish peo­ple to do their main weekly shop in Lidl, it must stock some well-known Ir­ish prod­ucts.

And con­vinc­ing peo­ple to do their main shop at the chain is cen­tral to Scally’s plans.

“It is crit­i­cal for fu­ture growth of the busi­ness be­cause the ma­jor­ity of peo­ple in Ireland are fa­mil­iar with Lidl and would cer­tainly shop with us from time to time and our fo­cus is on con­vert­ing those peo­ple to loyal, long-term cus­tomers.

“We’re con­stantly lis­ten­ing to cus­tomer feed­back in terms of what we’re miss­ing from the range, what they’d like to see us add to the as­sort­ment.

“And, you know, through the re­search you see very con­sis­tently the same re­quests com­ing for new prod­ucts from all dif­fer­ent parts of so­ci­ety and parts of the coun­try. So we’re just work­ing then on get­ting those prod­ucts listed as cus­tomers de­mand them.”

The dis­counter may have started off here 18 years ago with sparse stores stack­ing strange-look­ing goods in boxes and crates, but it has evolved sig­nif­i­cantly since then.

The ‘new con­cept’ shop in Tal­laght has fresh pro­duce, an ex­ten­sive bak­ery sec­tion and even back­ground mu­sic, al­beit its played quite faintly.

In ad­di­tion to the new sta­ple Ir­ish prod­ucts, Lidl has also added some ar­ti­san and niche prod­ucts to its range. Re­cent ad­di­tions in­clude low-fat snack Broghies and Pow­cow frozen yo­gurt. It also has sig­nif­i­cant re­la­tion­ships with the likes of Slaney Meats.

Scally is per­haps well-placed to un­der­stand that Ir­ish food chain.

From Tyrrellspass in Co West­meath, he is from a farm­ing fam­ily and a ca­reer in farm­ing was an op­tion for him grow­ing up. How­ever, he de­cided to study in­dus­trial en­gi­neer­ing in NUI Gal­way.

He saw him­self work­ing in man­u­fac­tur­ing, but an­other op­por­tu­nity caught his eye.

“I was just fin­ish­ing col­lege in 2003, I was start­ing to look at what jobs were out there, and I came across an ad­vert for a con­struc­tion man- ager with Lidl.

“Al­though it wasn’t ex­actly my type of en­gi­neer­ing I would have touched on civil en­gi­neer­ing as well as part of my de­gree. I’d heard a lit­tle bit about this new re­tailer that was en­ter­ing the coun­try so ap­plied for it and got the job,” he says.

Ini­tially, the role was fo­cused on con­struc­tion spec­i­fi­ca­tion for new stores.

“But I ac­tu­ally ended up only do­ing that for a mat­ter of weeks. Be­cause the com­pany was so new at the time, ev­ery­one was re­spon­si­ble for lots of dif­fer­ent things so I got quite quickly moved into lo­gis­tics.”

He moved up that ranks be­fore go­ing to work in Lidl France in 2012 as op­er­a­tions di­rec­tor, a board role.

“I sup­pose the busi­ness was go­ing through quite a bit of change in France at the time, there was a lot of in­vest­ment hap­pen­ing in the mar­ket over there and they were look­ing for a bit of in­ter­na­tional ex­pe­ri­ence to strengthen their team.”

In 2015 the op­por­tu­nity came to take up the top job in Ireland at the age of 32.

“It’s the dream job, I sup­pose, be­ing man­ag­ing di­rec­tor of the op­er­a­tion in your own coun­try, your home coun­try,” he says.

Much is of­ten made of his rel­a­tive youth, but Scally says the group fo­cuses on abil­ity and po­ten­tial over age.

Scally is over­see­ing con­tin­ued ex­pan­sion by the group. It will in­vest €200m here this year, its largest an­nual in­vest­ment in Ireland to date. This in­cludes a ma­jor new dis­tri­bu­tion cen­tre in New­bridge, Co Kil­dare. The project in­volves build­ing a new road and build­ing on the cen­tre it­self should be­gin in De­cem­ber.

The group now has 155 stores and Scally be­lieves that will level off at around 200 shops, al­though de­clines to say how soon that might be.

“It’s very dif­fi­cult to put a time­line on it, par­tially be­cause of the plan­ning process in Ireland. It’s im­por­tant for us to get the right sites,” he says.

“It will take a num­ber of years to get to that tar­get.”

Scally is also re­spon­si­ble for 38 stores in North­ern Ireland, the first of which opened in 1999.

Kan­tar’s re­search on the gro­cery mar­ket puts Lidl’s share of the mar­ket in the Repub­lic at 11.4pc. Is that enough for Scally?

“Mar­ket share is not a fig­ure that we’re ob­sessed with,” he says. “I think if we con­tinue to of­fer cus­tomers what they want, we will con­tinue to grow the busi­ness.”

Fel­low Ger­man dis­counter Aldi re­mains in close com­pe­ti­tion, but Scally says he spends lit­tle time think­ing about com­peti­tors.

Over the course of the re­ces­sion and re­cov­ery, shop­ping habits have changed.

Scally says that the group’s shop­pers are spend­ing more per visit.

“They’re trad­ing up into some of the higher value items but pri­mar­ily it’s be­cause they’re buy­ing more with us,” he says.

While some as­pects of the Lidl ex­pe­ri­ence might have changed, the fun­da­men­tals re­main the same. The shop in Tal­laght em­ploys around 35 peo­ple. An­other su­per­mar­ket could have close to twice as many peo­ple in the same foot­print.

Scally says ef­fi­cien­cies are what make Lidl work and that prices fall 2pc to 4pc an­nu­ally. This is not at the ex­pense of sup­pli­ers, he says.

“I think we’d have a rep­u­ta­tion in the mar­ket as be­ing very, very fair with sup­pli­ers.

“So we have fan­tas­tic sup­pli­ers that we’ve been work­ing with now for al­most 20 years in Ireland, many of which started as very small ar­ti­san sup­pli­ers with us and have grown over the years with us.”

Lidl is not pur­su­ing a dig­i­tal strat­egy, de­spite the fact that this is a mas­sive in­ter­na­tional trend.

“We have to also bear in mind that on­line is still less than 2pc of the Ir­ish food mar­ket. So al­though peo­ple have switched to on­line very much, be it for hol­i­days or for clothes shop­ping in par­tic­u­lar, food is dif­fer­ent and I think that won’t change in the fore­see­able fu­ture,” he says.

“Peo­ple want to see the qual­ity of the fresh fruit and veg that they’re buy­ing, they want to pick up their piece of meat and see it be­fore they put it in their trol­ley and that’s some­thing that on­line shop­ping doesn’t of­fer, ob­vi­ously.

“So I don’t be­lieve that we’re go­ing to switch to a larger pro­mo­tion of on­line in the fore­see­able fu­ture.”

Lidl is ex­per­i­ment­ing with sell­ing non-food items on­line in some coun­tries.

“That po­ten­tially is an op­tion for us into the fu­ture as well. But we see an op­tion to grow our bricks and mor­tar busi­ness more sig­nif­i­cantly than on­line cer­tainly for the years to come.”

One trend that Scally is fo­cus­ing on is the shift to con­ve­nience and healthy eat­ing.

“We’ve al­ways had some amount of con­ve­nience in the range, how­ever, we have just ex­panded it more sig­nif­i­cantly over the last num­ber of months, adding more and more lines.

“I sup­pose what we are notic­ing the trend in con­ve­nience is to­wards healthy con­ve­nience so it’s par­tic­u­larly sal­ads. Pro­teins and spi­ralised veg, for ex­am­ple, all of that kind of stuff is becoming more and more on trend, even pro­tein bars etc. So that’s where our fo­cus is on.”

So what does the fu­ture hold for Scally, who started life in Lidl straight af­ter col­lege? Surely he must be think­ing that a change would do him the world of good? But Scally re­mains very much fo­cused on the job at hand.

“I have a lot of am­bi­tion still left for Lidl in Ireland,” he says. “So I have plenty of work ahead of me in mak­ing those things hap­pen.”

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