Group is well able to talk the talk with pre-tax profits of €72m in 2010

DESPITE seeing its trading environment suffer in the past few years — particularly for its core Irish operations — the Musgrave Group has consistently talked up its ability to ride out the economic storm and build for its future growth.

It was established by the Musgrave family in the late 1800s and is now Ireland’s largest grocery distributor and food wholesaler. The Cork-based business showed it wasn’t all talk earlier this year when it reported a decent set of annual results for 2010. While group sales were down by 3%, to €4.4bn; its pre-tax profit was up by the same percentage to €72m and its debt of €59m was eliminated, with the group actually closing the year with net cash of €21m.

“Despite the economic crisis in Ireland and a very tough trading environment in all our markets, we delivered a good set of results in 2010,” group chief executive Chris Martin said on the back of those results, in April.

The group is a major player in the Irish grocery industry — operating nearly 1,100 stores around the country through its SuperValu, Centra, Daybreak and Mace chains; plus, now, Superquinn. In Britain, it operates through the Londis and Budgens brands; while it also has a thriving Spanish business mainly through the SuperValu brand.

Musgrave controls nearly 25% of the Irish grocery market — predominantly through SuperValu and Centra — and the takeover of the Superquinn business (which will retain its brand identity and most of its staff) could boost that share to just under 30%, nudging the group past Tesco in the process. Between them, Musgrave, Tesco Ireland and Dunnes Stores, the former chief operating officer of which, Andrew Street, took over as chief executive of Superquinn at the end of last year, control close to 80% of the market.

Musgrave has said that the addition of Superquinn to its portfolio — a move which has been speculated upon, on and off, for three years now — will sustain its competitiveness and support its growth agenda. Each of Musgrave’s main retail chains have consistently grown store numbers in recent years and the group sees its enhanced product offering/lower consumer price programme as providing its main platform for long-term growth and stability.