Tesco commitment to Irish market laudable
Not only does Dunne Stores have Tesco breathing down its neck, but the Aldi/Lidl threat is an increasing factor in the grocery landscape.
The latest news twist filtering out is that Dunnes is upping its own brand content in an effort to spread its appeal.
Own brand is still viewed as a quirky notion by a lot of shoppers. We are fond of our brands, but could that be about to change? Increasing media exposure to price issues looks to be having an impact and, whatever the reason, Lidl and Aldi are making their presence felt.
As these stores expand, people will become selective and split their shopping needs to reduce their bills.
Whatever about dual shopping programmes, Dunnes Stores was regarded as having its antennae up to shifting consumer demands.
What's of interest now is the decision by Dunnes to rack up more of its own brand products to compete with the increasing shift to own brand.
Still small by British standards, where up to 70% of product on shelves is own brand, a perceptible shift is taking place here.
"Yellow Pack" from Tesco's predecessor destroyed the own label idea in the 1980s when the brand became synonymous with poor quality products. The other key factor, not understood at the time, was that insecure emerging middle class did not want their fragile status undermined by own brand labels.
That day is long behind us and the interesting thing now is that for processors and food producers, they are about to face another pressure if they are to meet the exacting standards of Dunnes.
Caught in the middle of all of this is the raw materials producer as well, but this doesn't have to be all bad news. Not according to Tesco. I'm always sceptical about giant chains irrespective of their reputation. When they arrived in Ireland there were massive fears raised by bosses' lobby IBEC that this was the death-knell for Irish food processors.
The Tesco experience has been less traumatic than IBEC warned it would be.
Tesco's move to Ireland was just another milestone in the emergence of the new shopping experience.
What the British do, we do, and the shopping mall with the big multiples providing anchor tenants is the new holy grail, so it seems.
It doesn't matter that although the Austrian architect, who was responsible for their burgeoning presence across rural America, subsequently condemned them as inhuman, anti-social and anti the broader community.
Despite the mall factor, the Tesco experience for Irish suppliers looks to have been positive for processors.
Over the last six years, the group has worked closely with suppliers to help them with their product development. They set up an Irish Supplier Development Programme, undertaken jointly with Bord Bia and Enterprise Ireland.
Tesco's technical and commercial teams worked with Irish companies to develop their products, operations and business opportunities both in Ireland and Britain.
That joint venture has resulted in 120 companies producing Tesco own label both for Ireland and Britain. It was very much a joint effort as a result of which all expanded their businesses.
Country Crest is one of the successes. In the late Nineties, Country Crest was a small potato grower employing seven people in a small facility with annual sales of €2.1m.
Since then Michael and Gabriel Hoey have invested heavily in new premises, machinery and research and development facilities and the results speak for themselves - they now have a workforce of 80 and annual sales of over €18m.
They produce a number of Tesco Brand and Finest products as well as their own lines.
Tesco's commitment to the Irish market is impressive and Irish firms export about €420m worth of goods to its British stores.
