Musgrave Group Returns To Profit; Raises Concerns Over Impact Of Potential Brexit

The Musgrave Group returned to profit last year, aided by recent investment in the business and the sale of its loss-making operations in the UK to Booker.

During the year to 2 January 2016, Ireland’s largest retailer posted a pre-tax profit of €67.5m, compared to a loss of €9.6m in 2014. Overall turnover was down from €4.63bn to €4.44bn, impacted the disposal of the Budgens and Londis chains in the UK part way through the year. However, turnover from continuing operations grew 2.9% to €3.73bn with pre-tax profit coming in at €52.8m.

brought the business back to profit and positioned it on a path to growth. In recent years, against a backdrop of challenging trading conditions, we have invested in our brands and consolidated the Musgrave business as Ireland’s number one food retailer and wholesaler”.

During the year, SuperValu underlined its position as Ireland’s market leader with 221 stores and retail sales of €2.6bn. The group plans to invest €28m in growing the chain during 2016, opening five new stores.

Centra recorded retail sales of €1.5bn in 2015, cementing its position as Ireland’s number one convenience retailer. Centra will open 16 new stores this year as part of a €16m investment programme.

In Northern Ireland, Musgrave has brought together its retail and wholesale operations. Following the reorganisation, the group said it brands in the region – Centra, SuperValu, Mace and MarketPlace – were performing well, with concept stores showing good progress.

The group added that after several years of difficult trading conditions, the Spanish market is improving. It said that brand work to strengthen the Dialsur and Dialprix offer and investment in the development of concept stores, has helped to deliver a better performance in a recovering Spanish economy.

Meanwhile, Musgrave warned that the outlook remained uncertain, primarily due to external factors such weakening overseas economies and the UK’s potential exit from the EU. Martin said that a Brexit could make the Irish grocery market more challenging in that it could alter consumer confidence and affect tourism spend. He also predicted that if sterling continued to weaken against the euro on the back of a vote for the UK to leave the EU, there could be a return to the exodus of shoppers to Northern Ireland that occurred in 2009 when the two currencies neared parity.

NAM Implications:
  • Positive, realistic and managing expectations
  • Scope for Musgrave NAMs to factor this approach into their trade strategies