Musgrave Group powers ahead as sales rise to €4.6bn

SALES at Musgrave Group rose 4.5% to €4.6 billion last year making it the main challenger to Tesco in the Irish grocery market.

The Cork-based wholesaler owns eight retail franchises in Ireland and Britain including SuperValu and Centra in its home market which are continuing to grow.

Profits at the group rose at faster than sales and were up 14.2% to €81m.

Net debt fell by €139m to €186m over the year as the group continued to sell off Budgen’s stores to new owners in the British market. Last year was the eighth consecutive year the group has increased turnover and profits which was based on its retail partners giving the consumer what it wants.

Profits at roughly 2% of turnover were acceptable given its wholesaling remit and its commitment to back its retailers.

Chief executive Chris Martin said the group’s ambition was to ensure that its 3,000 store owners in Britain and Ireland made enough profit to stay in business.

“The investment in our brands, together with the approach of our entrepreneurial retail partners working and living in the communities in which they operate is generating sales growth in all our markets,” he said.

The group’s 3,000 stores in Britain and Ireland last year generated sales of €6.7 billion, up 7% on the previous year.

In Ireland combined retail sales of €3.4bn were generated in a market worth an estimated €13bn to €14bn. Of that, SuperValu retailers generated sales of €2bn, up 11%, with Centra sales up 17% at €1.2bn.

In Britain, Budgens and Londis accounted for €2.6bn sales. Spain, where the group is evolving slowly, delivered sales of €113m while in Northern Ireland, its franchises including SuperValu, Centra and DayToday chipped in sales of €556m.

As the group continued to grow last year, it added 47 new Centra Stores in Ireland while a further 64 were revamped. During the period also the 400th Centra Store was opened in Dublin’s Parnell St.

Musgrave expects to continue to open between 25 and 30 stores in Ireland for several years to come, based on the population outlook and the continuing economic buoyancy.

A further €180m will be invested by the group and its retail partners on new stores and in the refurbishment of existing outlets.

Mr Martin said for 2007 they expect to see further solid growth. “The group is focusing on innovation, making further enhancements to the retail brands while reducing costs without compromising quality,” he said.

Potential for expansion in Britain was immense given that there were thousands of “non-affiliated stores” in that market.

Last year investment in the group’s franchised stores topped €160m while 2,000 jobs were added across the country as new stores opened and others expanded.

Today the group directly and indirectly accounts for 44,000 jobs of which 24,000 are in Ireland, substantially more than Intel or any other multinational located here.