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Irish grocery retailers face a daunting challenge

Date: 12 Jan 2010

Publication: Sunday Independent Business
Author: Professor Damien McLoughlin
Date: Sunday, January 10, 2010

At this most reflective time of the year, it is worthwhile taking another look at the much criticised Irish grocery retailers; often pilloried for their uncompromising attitude towards suppliers and, perhaps with a little less justification, for being over-enthusiastic in seeking out margin during the Celtic Tiger years.

However, the contribution to society and the economy of this largely Irish-owned sector are less often noted. For example, grocery retail chains employ large numbers of people in many small towns. They have also pioneered new product segments, such as wine, and the expansion of choice in existing markets.
We take for granted both the excellence of Irish retailers and their commitment to the continued enhancement of both their facilities and their product ranges.

Grocery retail has had a torrid year, with falling consumer incomes and cross-border shopping being two major challenges. Their response has been to champion the customer (and their own businesses) by offering more value products and reducing prices. They face a daunting challenge. The world’s largest retailer, Wal-Mart through its Asda franchise is benefiting from the rush of shoppers northwards. The fifth-best performing Wal-Mart outlet in the world is in Enniskillen.

Here is the real problem - a supermarket worker in Asda in Enniskillen earns the equivalent of €6.45 (stg £5.80) an hour. Under the inexplicable J1.C rules, a similar worker in a supermarket in Cavan town earns €9.35 – 40 per cent more. Surely this is another justification for a significant cut in the minimum wage?

Damien McLoughlin is Professor of Marketing at UCD Michael Smurfit Graduate Business School.

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Irish grocery retailers face a daunting challenge

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