Musgrave considers standalone coffee shop chain

SuperValu owner Musgrave is eyeing the potential roll-out of a standalone coffee shop chain as part of its expansion plans.

Expansion could also see the group grow its Donnybrook Fair store network as well as ongoing store openings across its established SuperValu and Centra brands. In total, it is looking at adding around 1.5 million sq ft of extra store space in the next six years.

Musgrave is due to trial its existing Frank and Honest coffee brand - which currently acts as an in-house coffee shop in some SuperValu branches - as a standalone high street shop in Dunboyne, Co Meath before deciding whether a larger roll-out is warranted. It is also looking at a number of other trial sites.

The group has already tasted success with its chain of Chipmongers standalone fast food outlets.

Outgoing chief executive Chris Martin said Musgrave's recent acquisitions - Donnybrook Fair and foodservice business La Rousse Foods - have performed well and said "we continue to explore further acquisition opportunities".

Mr Martin, Musgrave CEO since 2005, is set to step down in the coming months with an internal and external search for his successor underway. He is expected to seek a number of non-executive board roles with companies in Ireland and the UK.

Musgrave CEO Chris Martin
Musgrave CEO Chris Martin

Musgrave said it grew group turnover by almost 4% to €3.9bn last year, with pre-tax profits rising 5.6% to €84.5m. Its net asset value increased by nearly €80m to €410m and the group ended 2018 in a €16m net cash position. SuperValu grew sales last year by 1.5% to €2.9bn, with Centra growing 4% to €1.9bn.

Mr Martin said it is "too early" to say if Musgrave will expand the Donnybrook Fair business outside of Dublin.

"We'll look at possible store openings and online, but it will be very selective and it's not currently on the agenda. But, the reality is the brand won't stand still. But, it will be developed appropriately in the right places," he said.

Outside of Ireland, Mr Martin said there is room to grow the group's Dialsur cash and carry and Dialprix retail businesses in the Valencia/Murcia region of Spain, which are currently generating revenues of around €185m. Musgrave is also looking, in the longer term, to export its own label products and take brands, such as Frank and Honest, overseas by hooking up with local partners in certain markets including the Middle East.

Online will also play a large part in Musgrave's future growth, with the company predicting the internet will cater for 8% of Irish grocery sales by 2025 compared to around 1.5% currently.

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