Safeway has 12 superstores in the province. The Competition Commission says they represent 24% of the stores larger than 1,400 sq m. That percentage excludes Dunnes and SuperValu because they are not deemed “effective competition”.
Chief executive of the Northern Ireland Independent Retail Trade Association Bryan Gray was upbeat about the future of the independent sector.
“The Northern Ireland c-store sector is healthy because of the level of investment in our shops, which we believe can meet any competition,” said Gray.
This confidence was echoed by Curley’s Supermarkets and Winecellars managing director Hugh Kennedy.
“We have weathered the arrival of other mainland supermarkets and our market share continues to grow,” said Kennedy. “If the takeover bid is successful we would keep an eye on the situation but we feel confident about our future.”
Independent retailers predicted that the arrival of Morrisons would most likely affect Tesco, because it was another price-driven operator.
Ken McWhinney, deputy MD and sales and marketing director of Hendersons which supplies 400 Spar, VG and Vivo retailers and owns the Andrew Millar c-store group, said: “We complement the multiples and we’ll let them fight it out with each other.”
But he said there was no room for complacency because in his experience Morrisons could act more aggressively than Safeway.
NIIRTA’s Gray believed Morrisons’ impact would be limited as it was, in effect, a “substitute player” for Safeway and not an entrant looking for new locations.
However, if Morrisons decided to sell the stores it could have a dramatic and muddled affect on Northern Ireland’s market.
Gray said that the best case scenario for the province’s independent sector would be if all the Safeway stores were closed, while the worst outlook would be for Asda to enter the market.