Mace and Musgrave eye opportunities in Irish downturn

L to r: Centra Marley Park, Dublin; Kelly: not all doom and gloom

BWG Foods and Musgrave, two of Ireland’s leading symbol group retailers, said convenience stores must offer value to succeed in the current recession.

Speaking at the Insight/NACS Global Convenience Benchmarks event in Dublin last month, Willie O’Byrne, managing director, BWG (MACE) Ireland, and Ray Kelly, marketing director of Musgrave Retail Partners Ireland, told delegates there were market opportunities despite the downturn. And they both advised businesses not to rein in on investment.

“It’s not all doom and gloom,” said Kelly, whose company operates 470 Centra convenience stores in Ireland. “People still want convenience and quality food. There is an opportunity for the convenience sector to build on brand space during this recessionary period and deliver value to customers.”

Centra: flawless in-store execution and staying close to customers

Kelly said Musgrave’s strategy was three-pronged. It focuses on flawless execution in-store, communicating value for money and staying close to customers.

“We are dialing up the volume on our value for money range, including own brand, and communicating it in store,” he said.

O’Byrne at BWG Foods, which operates the Mace and Spar franchises in Ireland, was upbeat too.

"By being willing to adapt and stay relevant to changing customer requirements, convenience can hold its own during this recession," he said.

To meet changing consumer demands and a shift to value in the Irish retail market, O'Byrne said his company was focusing on own label and promotions.

BWG has teamed up with UK wholesaler, Palmer & Harvey to offer the M own label brand in its MACE stores, overcoming the issue of scale typically associated with private label ranges.

On promotions, O'Byrne said: “We want to give shoppers validation for shopping with us. Let’s not get involved in shopping basket comparisons with the multiples. We can’t go toe to toe across the same range but we can demonstrate that our prices on staples offer excellent value for money, that we have promotions at all times and the rest of the range is fair value. We find that strategy is paying off.”

Presenting in one of the most advanced convenience markets in Europe, Kelly said innovation and business development in the Irish market was strong and this should continue despite challenging conditions.

“Cutting inefficiency and cost out is important but some people will make a mistake of cutting costs in their standards and service,” he said. “Tuned in retailers will survive but there will be some casualties along the way. Convenience stores have that opportunity to give good value.”

O’Byrne agreed. “When it comes to recession, cut out costs but don’t cut out investment and that includes innovation, promotion and marketing spend,” he said.

O’Byrne said consolidation, niche markets and innovation offered further opportunities in the downturn.

He predicted there would be rationalisation in the retail and wholesale markets in Ireland, led by mergers and acquisition activity rather than business failures.

The growth of discounters is one niche market the sector can exploit, he added.

“The expansion of Aldi and Lidl in Ireland is paradoxical because the convenience stores located closest to them are benefiting due to the discounters’ narrower range and the trend to shop little and often,” said O’Byrne.

Centra: a strong food-to-go offer includes a soup bar and 'Wokery'

Kelly said keeping close to customers was key in his company’s success.

“We have invested heavily in customer insight to stay in tune with customer lifestyles. By staying close to shoppers we can satisfy their needs and it gives us information to evolve the brand.”

As a result, Musgrave has changed its offering in areas such as food-to-go.

Kelly said the company has developed food-to-go ‘bundles’ centred around breakfast, lunch and dinner occasions to make the offer more appealing.

“Price is important more than ever but it’s not the only way to unlock customers’ business,” he said.

BWG has focused on innovation too, said O’Byrne. It has developed a leading food-to-go offer at its 24-hour Spar store in Dublin’s entertainment district. It includes a stone baked pizza offer and creperie.

“We have had very good results from both trials,” he said.

The company has also overhauled its Eurospar Barrow Street store in Dublin’s commercial quarter.

“We’ve adopted a more rigorous, departmental approach to the store layout and addressed how we reconcile food-to-go with a supermarket format. We have recorded strong sales and margin results,” he said.

O’Byrne said BWG had grown the Eurospar share by evolving the brand. “We have grown the multiple share for Eurospar without having to become a player in the race to the bottom, i.e., taking double page spreads in the Sunday papers advertising offers.”

Kelly said Musgrave’s three-fold strategy had also stood Centra in good stead.

“We are confident Centra will exit the current recession as a stronger and more focused brand,” he concluded.