The Musgrave Group has announced a small increase in sales and a slight decline in profits for 2011.
The group reported sales of €4.5 billion, up 1.6 per cent, delivering a profit of €71 million, one per cent below last year for the group’s operations in Ireland, the UK and Spain. Debt increased from a net cash position of €21m in 2010 to €187m at year-end following the acquisition of Superquinn.
Chris Martin, Musgrave Group chief executive said: “Despite the economic challenges and a consumer that is focused on spending less, we have delivered a good performance with turnover and profit remaining steady for the third consecutive year. 2012 continues to be tough but our brands are performing well, benefiting from customers who want to shop locally for value.
“In a challenging retail market, we have continued to make progress in Great Britain with our Budgens and Londis brands achieving retail sales of €2bn in 2011. We have been investing heavily in value by cutting the price on thousands of products while improving the quality and depth of range in our 2,000 Budgens and Londis stores. Investment in brand development and innovation helped us to deliver on our recruitment targets with the number of Londis retailers increasing by more than 100, bringing the total to 1,879.”
In Ireland Martin said the past three years have brought profound and permanent change to the grocery sector. He said: “Against this backdrop, we initiated a transformation programme to strengthen our brands and to improve the competitiveness of our business. Through brand innovation, investing in consumer insight, improved partnership with suppliers and a sustained focus on cost reduction we have delivered better value to consumers.
“Together with our retail partners in SuperValu, Centra and Daybreak, we invested €284 million in Ireland in 2011 in store openings, refurbishments and acquisitions.”
Musgrave spend €1.75bn on Irish-sourced goods and services last year and it is building on this by creating opportunities for Irish companies in the UK. “Our groupwide own-brand strategy is providing 33 Irish suppliers with additional retail sales to our UK network of stores,” said Martin.
The outlook for the group this year remains a challenge, he admitted, although its brands are performing well in both the UK and Irish markets so far with the introduction of the SuperValu own-label range in Ireland and the UK. Initial customer indications are good with a 15 per cent increase in own-label sales. “We are forecasting to achieve €1bn in Own Brand sales across the Group by 2014,” said Martin.
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