Already, the sources say, it has been approached by a number of disgruntled SuperValu and Centra retailers who are said to be unhappy with their current franchise agreement with the Musgrave group and keen to join a new network.
Superquinn’s last such initiative, a SuperQ joint venture with Texaco a few years ago,
ended in failure, mainly because of logistical problems.
However, for the company’s new chief executive, Simon Burke, who has to decide on the franchise option, today’s circumstances are different. It is no secret that the Musgrave group, the largest franchise chain in the Republic, is experiencing unrest among a number of retailers over pricing and discount issues, with some threatening to switch to other symbol groups such as Spar and ADM Londis.
In August, the Dublin-based Griffin Group, with seven stores and an annual turnover of €35m, defected from the Musgrave camp to link up with Londis. A statement from Musgrave said the break-up was “due to divergent views on business strategy which we have not been able to reconcile”.
Some Centra franchisees in Dublin claim that a new pricing strategy being pushed by Musgrave, to counter claims of grocery sector rip-offs, is hitting their profits. One retailer said the cost of security to cover 24-hour opening meant convenience stores in the city had to charge customers more. He couldn’t afford the lower prices that Musgrave favoured.
Other retailers complain that Musgrave’s new distribution centre at Kilcock, County Kildare, is also affecting their operations. Previously, they had dealt directly with suppliers and benefited from discounts. Now Musgrave is getting the discounts and retailers said they were having to put up prices to maintain margins.
It is against that background that some are now looking to Superquinn to offer an alternative franchise option.
The trial of 15 executives from Italian dairy giant Parmalat, including founder Carlisto Tanzi, began in Italy this week. They are charged with market rigging, misleading regulators and providing false accounting information after a black hole of almost E14bn was found in the firm’s accounts.
US retail giant Wal-Mart has launched a programme, Remix, which is designed to improve its distribution system. Remix will designate warehouses by distribution need based on the speed with which certain products sell in its stores.
US retail associations have filed an anti-trust lawsuit against Bank of America, Citigroup, JPMorgan Chase, Mastercard and Visa claiming they acted together to charge excessive credit card fees. The National Association of Convenience Stores, the National Association of Chain Drug Stores, the National Community Pharmacists Association and the National Cooperative Grocers Association have filed the lawsuit.
Nestlé has set up a E500m fund to help grow promising new businesses in science and nutrition.
Constellation Brands has bought the Rex Goliath wine label from California’s Hahn Estates for an undisclosed sum.
French wine group Pernod Ricard is still on the lookout for acquisitions despite taking over Allied Domecq two months ago. Richard Burrows, joint managing director for Pernod Ricard UK, said: “We have not satisfied our long-term ambitions through this deal and remain alert to any situation that may arise.” The group revealed a 9.4% increase in wine and spirit sales to E1,650m and a 7.9% increase in operating profit to E287m in half-year results.
n trial begins
n remix plan
n new fund
n label sold
n for sale?