Dunnes beats them all again in cut-throat sec­tor

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

BACK in the last cen­tury, my first proper paid job was in Dunnes Stores in Cor­nelscourt, Dublin. Long be­fore the N11 ripped through the south­side of Dublin, by­pass­ing leafy vil­lages such as Stil­lor­gan, Foxrock and Cabin­teely, Dunnes Stores in Cor­nelscourt was the mod­ern out­post of a grow­ing re­tail em­pire that traced its roots back to Cork, where it opened its first store in 1944.

Cor­nelscourt was then the largest of the re­tailer’s stores and, in many ways, it was Ire­land’s an­swer to the out-of-town depart­ment stores and malls that sprung up across the USA in the 1960s and 1970s.

Not many peo­ple in the Ir­ish re­tail trade gave the store much chance of suc­cess and oth­ers strug­gled to un­der­stand why any­body in their right mind would drive to a small vil­lage on the out­skirts of Dublin to do the weekly shop.

Clearly, Ben Dunne Snr, the founder of the busi­ness, knew very well what he was do­ing.

My sum­mer job was or­gan­ised by Jim Shields, a neigh­bour whose son, Kevin, I used to hang out with at the time.

Jim cut his com­mer­cial teeth in the re­tail sec­tor in New York in the 1970s and was re­garded as a heavy-hit­ter in the in­dus­try.

When he moved his fam­ily from Queens in New York back to Ire­land to work with Dunnes Stores, one can only pre­sume that he came armed with some high­fa­lutin’ re­tail con­cepts that he brought with him from the more com­mer­cially so­phis­ti­cated New World.

I’ve no idea what be­came of Jim, but my mate Kevin went on to set up the well-known indie rock band My Bloody Valen­tine, while his sis­ter Eileen is now a well-known shoe de­signer whose shoes would prob­a­bly sit seam­lessly along­side other lead­ing fash­ion de­sign­ers such as Michael Mortell, Carolyn Don­nelly, Paul Costel­loe and Peter O’brien — all of whom de­sign for Dunnes.

The in­tro­duc­tion of fash­ion la­bels like these, how­ever, un­der­lines the full ex­tent of the trans­for­ma­tion which Dunnes has un­der­gone over the last 10 years or so.

To its credit, re­tail an­a­lysts say that Dunnes Stores has never taken the mar­ket or its cus­tomers for granted and while there may be a lin­ger­ing per­cep­tion that it is slow to re­act to changes in the mar­ket­place, when it does, it does so at scale and of­ten in a man­ner which of­ten takes its com­peti­tors by com­plete sur­prise.

The ac­qui­si­tion of Cafe Sol and Whe­lan’s Butch­ers is a good ex­am­ple. On an­other level, the re­tail ex­pe­ri­ence which it now of­fers shop­pers has also been trans­formed.

Apart from a ma­jor re­design of its stores over the past two years, the in­tro­duc­tion of de­signer la­bels across its cloth­ing and home­ware de­part­ments and re­newed fo­cus on the value end of the mar­ket has re-en­er­gised the brand in a cut-throat mar­ket try­ing to fig­ure out its fu­ture in a dig­i­tal world.

Down through the years, how­ever, Dunnes Stores and the three gen­er­a­tions of the Dunne fam­ily who have over­seen its growth have al­ways been no­to­ri­ously se­cre­tive and me­dia-shy.

This, per­haps, has added to the al­lure of its brand. In a very rare in­ter­view granted to a young Frank Fitzgib­bon (now ed­i­tor of The Sun­day Times) in the early 1980s, the founder of the com­pany, Ben Dunne Snr, re­sponded to ev­ery ques­tion asked of him with the same an­swer — “Dunnes Stores bet­ter value, beats them all.”

It was a hi­lar­i­ous in­ter­view that per­fectly summed up the re­tailer’s at­ti­tude to­wards the me­dia spot­light and prob­a­bly set the tone, and in­deed the pa­ram­e­ters, for much of its sub­se­quent en­gage­ments with it down through the years.

But be­hind this me­dia-shy and se­cre­tive ve­neer is a finely-tuned fam­ily-run re­tail brand that has an es­ti­mated turnover in ex­cess of €3.6bn a year, over 15,000 staff and 136 stores in the Repub­lic, North­ern Ire­land and Spain.

As the re­cent batch of re­tail fig­ures from Kan­tar World­panel show, Dunnes Stores has once again re­gained its crown as Ire­land’s largest re­tail brand with a mar­ket share of 22.1pc, com­fort­ably ahead of Tesco on 21.5pc.

The re­tailer’s re­cent run of suc­cess, how­ever, had noth­ing to do with Paul Costel­loe or Carolyn Don­nelly but rather its on­go­ing Ev­ery­day Savers pro­mo­tion, a firm poke in the eye of its ri­vals in the value end of the mar­ket, one which has al­ways been cen­tral to its busi­ness model.

But there are other rea­sons why the re­tail brand has sur­vived and thrived down through the years. The re­tail grave­yard is lit­tered with the tomb­stones of com­pa­nies that have been bought, man­aged and flipped by VC and pri­vate eq­uity op­por­tunists, of­ten as part of highly lever­aged deals or wider prop­erty plays.

Fam­ily-run re­tail em­pires, how­ever, tend to en­dure, evolve in line with mar­ket trends and in most cases thrive sim­ply be­cause they are un­fet­tered by stock mar­ket obli­ga­tions or the fi­nan­cial needs of a VC com­pany.

The Al­brecht and Sch­warz fam­i­lies who own Aldi and Lidl re­spec­tively and, of course, the ex­tended Dunne/hef­fer­nan dy­nasty who run the show are tes­ta­ment to this.

And long may they en­dure. Con­tact John Mcgee at john@ad­world.ie

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