Top stories in the papers this week: 17 – 22 April 2010
Tesco sales increase 15% following May price cuts; Number of shoppers heading north slumps; Consumer power leads to price cuts
Print22 April 2010
1. Tesco sales increase 15% following May price cuts
Tesco Ireland’s sales fell 7.5% to €2.9 billion in the year to the end of February. However The Irish Times reports that price cuts introduced in May were responsible for a 10% growth in the supermarket’s number of transactions, and 15% rise in sales volumes. What’s more, trading at Tesco’s 11 stores in Border areas rose by an average of 33% year-on-year, and sales of the multiples’s own-brand goods have risen to 35% of total sales, up from 32.5%.
And while Tesco does not disclose its Irish profits, The Irish Independent has calculated these potential earnings. Based on the roughly 9% profit margin the retailer is thought to enjoy here, the paper has estimated Tesco’s Irish arm likely posted a profit in the region of €260m in the last financial year.
2. Number of shoppers heading north slumps
Southern shoppers are starting to shun sprees to Northern Ireland, new figures from Experian suggest. The Irish Examiner reports that although year-on-year footfall fell by 1.6% in the Republic in January, footfall increased in February and again in March by 1% and 0.4% respectively. By comparison, in Northern Ireland, January year-on-year footfall figures were down 8.3%, whilst February and March also decreased by 4.3% and 4.6% respectively.
What’s more, Asda and Sainsbury’s have seen their share of the Republic’s grocery market collapse by 40% over the last year, Kantar Worldpanel research shows. The Sunday Tribune reports the fall came because shoppers decided to take advantage of the price war between retailers in the south, where like-for like-price deflation in March reached 7%. The UK rise in Vat has also brought prices closer to those of the Republic while shoppers here are choosing more own brand lines to reduce bills further.
3. Consumer power leads to price cuts
David Berry, business group director of Kantar Worldpanel, explains in The Sunday Tribune how price deflation has affected the market shares of Ireland’s major retailers. He highlights that Aldi and Lidl witnessed an increase in value sales, lifting their combined share of the market by just under one percentage point to 8.8%. Furthermore, Tesco was the only other retailer to have increased its share this quarter.
4. Cigarettes worth €3.1m seized
Customs officers at Dublin Port seized over seven million cigarettes earlier this week, with an estimated street value of around €3.1million. The Irish Times reports the discovery was made when officers intercepted and examined a 40-foot container, which had arrived in Dublin from Spain via The Netherlands. Benny Gilsenan, spokesman for Retailers Against Smuggling, praised the seizure but stressed the need for Government to introduce “appropriate sentences” to clampdown on smuggling.
5. Retailers unveil plan to recruit 1,000 staff
Fifteen leading Irish retailers – including Superquinn – have unveiled plans to recruit 1,000 full-time staff over the next 12 months. Industry group Retail Excellence Ireland (REI) has launched a new campaign dubbed ‘Back to Work in Retail’, and enlisted Superquinn founder Feargal Quinn as the public face of the scheme. The Irish Independent reports the programme will see REI offering intensive training courses to help match applicants to vacancies.
Also:
Primary producers are losing out in retail price war, claims IFA (The Irish Examiner)
Blame the Government for high prices, not retailers (The Irish Times)
Tesco’s ambitious, achievable strategy makes it worth a punt on stock market (The Irish Independent)
Arrabawn co-op buys Dawn milk business in Galway (The Irish Times)
Carrickmines site plan more complex retail conundrum than crony capitalism (The Irish Times)
Glanbia agrees to sell dairy unit to co-op (The Irish Times)
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