independent

Saturday 19 April 2014

Dunnes plans redundancies as competition takes its toll

A model wears a dress from Dunnes’ range

DUNNES Stores is seeking a number of voluntary redundancies at both its head office and at store level, the Irish Independent has learnt.

It's not known precisely how many redundancies Ireland's second biggest retailer is seeking, but staff have been told of the plan within the past week.

Dunnes employs hundreds of people at its head office in Dublin's city centre and about 14,000 in total across its store network.

The planned redundancies – thought to be limited in scale – come as Dunnes battles with rivals in the run-up to Christmas. Industry insiders reckon the retailer, headed by Margaret Heffernan and Frank Dunne, has spent tens of millions of euro so far this year issuing special vouchers to customers in an effort to retain custom.

The secretive retailer is also currently looking to hire someone to head up its Valueclub customer loyalty programme.

They'll be tasked with driving "incremental spend and cross-shopping behaviour," according to Dunnes. They'll also have to "expand customer targeting to optimise the effectiveness of promotions".

In the 12 weeks to November 10, Dunnes increased its share of Ireland's grocery market by 2.3pc to 23.6pc, according to research group Kantar Worldpanel. Tesco is the biggest retailer here, but its market share in Ireland fell during that same period, by 6pc to 26.5pc.

Tesco said this week that its like-for-like sales in Ireland in the quarter to November 23 slumped 8.1pc in the face of stiffer competition in the market. Over €400m has been wiped from Tesco's Irish sales since the beginning of the year.

German discounters Aldi and Lidl have been gnawing away at the market share of the top retailers.

Between them, the pair now control a combined 13.7pc share of Ireland's multi-billion grocery market, with Aldi on 7.4pc and Lidl on 6.9pc.

But sources reckon a truer reflection of their combined market share might be closer to 20pc. SuperValu, the chain controlled by the Cork-based Musgrave group, has a 19.4pc share of the market. Musgrave also owns Superquinn, which has a 5.2pc share. Superquinn will be rebranded as SuperValu early next year.

Aldi has just launched a High Court action against Dunnes, claiming the Irish retailer has infringed its trademark in adverts that compare the two multiples' prices for a number of items.

It's been reported that Aldi will challenge the ads, claiming that the products aren't being compared on a like-for-like basis.

Aldi won a price comparison case taken against Tesco here last year.

Irish Independent

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