Superquinn’s passing from the hands of Feargal Quinn, who built up the family-owned supermarket chain from scratch from 1960, was one of the biggest industry stories of last year.
The retailing legend’s decision to sell to a group of private investors was arguably the type of shrewd decision that served Quinn so well during an impressive career in which he built up a 20-strong chain of upmarket stores with estimated sales nearing E1bn.
After all, Tesco wasn’t about to get any smaller in Ireland; there were rumours of Asda being ready to jump into the Irish market at the slightest whiff of an opportunity; and the Groceries Order was heading for the history books.
The best thing about the deal was that he had managed to find an Irish buyer in the shape of the Select Retail Holdings consortium headed by the former chairman of toy retailer Hamleys and Virgin executive Simon Burke. Quinn also managed to retain a 5% share in the new business and stayed on as non-executive president. Nevertheless, while clearly retaining admiration for his predecessor, Burke is keen to point out where work is needed to correct some of the decisions taken in recent years.
“It is a business with a great brand and heritage,” he admits, “but it had lost its way over the past five years for a variety or reasons.”
These, he says, included a “kneejerk reaction” to the arrival of discounters Aldi and Lidl, when Superquinn “really didn’t need to respond price for price”. It thereby highlighted the fact that it had been more expensive than its rivals - when it had never traded its reputation on price in the first place. Another reason was the opening of Superquinn’s first distribution centre at Blanchardstown, west of Dublin, which was “arguably not necessary” due to the modest size of the supermarket chain, he says.
“When I took over, only 30% of sales were going through the DC,” he says, adding that the chain’s disastrous introduction of SAP software was a debacle, leaving it without reliable data for the best part of a year.
More recently, The Grocer revealed how Burke decided to put the brakes on one of Quinn’s parting legacies - the attempted creation of a new empire of convenience stores under the Superquinn Select moniker (The Grocer, December 17, p12), although the company at least remains committed to keeping the first two stores under the format open to monitor progress.
In the meantime, Burke’s expansion plans clearly revolve around making the most of both of Superquinn’s assets - stores and land.
Two new developments are already in the pipeline, reveals Burke - a 40,000 sq ft store at Rathgar in south Dublin, which is due to open this year, and a more modest 12,000 sq ft development at Carrickmines, also in south Dublin, which is set to start trading next year.
On top of this, money is being made available to tidy up a tired estate, while subtle changes such as a redesign of the chain’s logo are also slowly being rolled out. The chain’s slogan, ‘the specialists in fresh food’, will also change, as the retailer searches for a new positioning for a new generation of Irish shoppers.
Its online delivery activity, currently only available in parts of Dublin, will remain under scrutiny with a view to rolling it out further afield if the gains are deemed viable.
Burke insists that the ending of the Groceries Order will not hinder progress. “I would have preferred it not to go, speaking as a relatively small player coming from a comparative position of weakness.
“But we will compete in whatever conditions prevail and we have done well in areas such as fresh meat and proteins, outperforming the market. It is another thing to put into the mix, but it won’t give me sleepless nights.”
Suspicions that Burke and his seven business partners are planning the tidy up to sell off the business for a healthy profit remain. However, Burke insists this is wide of the mark.
“As far as the retail business is concerned, we believe there is a huge opportunity here and the shareholders are not on any type of timescale. We might be here for five years, or it might be 25 years, so in that sense there shouldn’t be any more questions about the long-term future of Superquinn than there should be about Musgrave, Dunnes and so on.”
Meanwhile, Burke appears to be an ardent believer in the adage that actions speak louder than words. He and the other directors are making sure they take time out of their busy schedules to reassure staff, both on and off the shopfloor, of the top team’s commitment to the business.
Burke will, for instance, occasionally go out to have a lunchtime sandwich with store staff to dispel fears that the business is about to be broken up for a property deal.
Nevertheless, he admits: “The rumour mill never ceases. I’ve heard things about store closures and us going into hardware retailing, which simply aren’t true.
“What I can say is that I will be here for as long as I think I can add value to the business. I was at Virgin for 12 years and Hamleys for four, so I am not particularly a job hopper.”