Asda emerged as the favourite to snap up the chain although rumours also abound regarding interest from Sainsbury’s, Waitrose and even Tesco.
An Asda move south of the border has been the subject of speculation for some time. It was previously linked with Dunnes, but no deal materialised. More recently, it was reported to be negotiating sites in the Dublin area. With the economic downturn, the Republic may now be less attractive than it was, but Superquinn, profitable again after a number of difficult years and with a 7.3% share of the grocery sector, is a tempting target.
Asda refused to comment on whether it was interested but a spokesman welcomed overtures from National Consumer Agency chief executive Ann Fitzgerald, who is on record as saying that the Republic “needs an Asda” to generate greater competition among its main supermarket groups.
“Past studies have shown that Tesco charges at least 15% more in the south than it does in the north, which is why our stores on the border do such a roaring trade.” Sainsbury’s, with a similar shopper profile to the upmarket Superquinn, declined to comment.
As the Irish market-leader, with a 26% share, any Tesco bid would almost certainly be vetoed on competition grounds.
Select Retail Holdings, the Irish business consortium that bought the family-owned Superquinn three years ago for €450m, has confirmed receiving “expressions of interest” from three British retail groups. The owners, mainly property developers, are being advised by Goldman Sachs on the approaches by UK groups.
The chain, which increased sales last year by 7% to €620m, has been investing heavily in refurbishing existing stores and has also opened three new outlets, one in Dublin and two in the provinces.
Superquinn was founded by Feargal Quinn in 1960. Famed for its pioneering approach, the Dublin-based chain was the first Irish retailer to prepare fresh food in its stores every day, launching specialist fresh food departments including delis, bakers and sausage kitchens in 1973. It also launched Ireland’s first retail loyalty scheme in the early 1990s and was the first Irish grocery retail multiple to offer online shopping. Superquinn built up an empire of 20 large store and nine shopping centres. However sales declined as the chain faced challenges from competitors such as Tesco, Dunnes and M&S. In 2005 Superquinn was sold to Irish consortium Select Retail Holdings in a deal worth €420m (£338m). The company reported sales of €620m (£499m) for 2007, up 7% on 2006, and forecast this to rise to €700m in 2008.