Business Irish

Monday 22 September 2014

Talking 
shop - Martin Kelleher on Superquinn takeover

Interview: Martin Kelleher, MD, Musgrave Retail Partners Ireland

Published 24/07/2014 | 02:30

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Martin Kelleher, MD, Musgrave Retail Partners Ireland

SUPERMARKET boss Martin Kelleher claims he doesn't care much about the number ones and number twos, that is until one of his own makes it to the top spot.

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Unlike Tesco chief executive Philip Clarke, who is stepping down after the retail giant was hit with a profit warning, he doesn't appear to fear for his future as head of Musgrave-owned SuperValu and Centra stores.

"Maybe I should, but I don't," Kelleher says, with little pity for Clarke's fate with a not-so sympathetic "God love him".

"It's a different set of circumstances. Tesco is a plc, Musgrave is a private company.

"We very much have a set of values which think long-term in our investments. We're focused on what's right for the long-term rather than the quarter-on -quarter behaviour."

The Musgrave man oversees SuperValu's 222 supermarkets and Centra's 460 convenience stores dotted around the country, but he prides himself on having entrepreneurs run each location independently.

This in turn puts more local produce on the shelves and more cash back into communities across Ireland, says Kelleher, who has held the role since 2010.

Latest figures show this set-up works as the supermarket chain is the number two choice for shoppers.

Kelleher won't be drawn on whether SuperValu, which has almost 25pc market share, will surpass Tesco's 26pc by the crucial Christmas period.

"We're not that worried about ones or twos," he says, despite mentioning Centra's position as the country's leading convenience store several times.

"The way our business works, in both SuperValu and Centra, is minding our retailers' businesses. So we support these local retailers and make sure they are successful and have all the tools they need to satisfy their local community, their local markets.

"If we keep focused on that, the ones and twos look after themselves."

He maintains that success is down to giving customers quality, choice and value.

The company itself has also been making some big investments, spending up to €10m to revamp the 24 Superquinn stores it took over, and rebranding them as SuperValu, which he says "is going good".

"Obviously, with a brand like Superquinn, it has taken time for people to understand what SuperValu is about, but we are very happy with the progress we are making.

Nostalgia

"Some people who would have stayed (with Superquinn) for nostalgia made a choice that now that name has changed they will shop elsewhere.

"But the vast majority of shoppers have stayed with us."

What has stayed the same is the Superquinn-style bakeries and meat counters, he adds, and the retailer's iconic brand of sausages.

"It was crucial we kept them. After the brand changeover Twitter was all about the sausages. That was a little disappointing as we were announcing a broader number of events, including redundancies.

"It was funny to see people were more concerned about the sausages.

"But keeping them has also allowed us to sell them in SuperValu and Centra stores, so the volume has doubled. By making them more available we have grown the product."

Summer has been good to retailers, with customers "treating themselves". Meats - including the infamous sausages - are being snapped up for barbecues, and baskets are being filled with ice-creams, cold drinks and sun cream.

The World Cup also resulted in a 50pc jump in pizza sales, Kelleher says.

While Centra is reaping the rewards of the convenience market for those on the go, it is SuperValu's flexibility that makes it stand out from others, Kelleher claims.

If a store runs out of fresh BBQ burgers, prime beef can be minced on the spot rather than see custom go elsewhere. Managers have also been spotted behind meat counters preparing packs of chicken wings and fillets when there's little else left for grill on the shelves.

"In a larger managed store people would simply say 'we don't have the stock', but not our entrepreneurs and retailers," he says.

"It's their business and they know what the family wants."

The Cork-man studied business in his local university and worked in Gestetner and KPMG before joining the growing wholesale and retail giant in 1996. Back in his home county Kelleher soared through the ranks.

He argues the support the company gives communities is unparalleled.

A community impact study found Centra's 460 stores alone spent €241.1m in local communities including in wages, donations, sponsorships and goods and services.

And while Kelleher queries if there is room for more retail space in ireland, up to €3m is being injected in to 13 more stores to be up and running by Christmas, creating 150 new jobs.

"There are 35,000 people working in the wider family of SuperValu, Centra and Musgrave. It's the largest employer in the country after the HSE," he says.

"There's 11,000 in Centra, well ahead of your Googles and PayPals."

While it appears the figures add up - SuperValu and Centra boasted combined retail sales of €4.5bn in 2013 - margin and competition is tight with discount retailers like Aldi and Lidl nipping at their heals.

Kelleher maintains competition and choice is good, as it makes stores be the best they can be.

But he admits it is a constant struggle to hit the middle ground, with consumers wanting to pay less while commodity prices are on the rise.

He also criticises certain stores for putting the squeeze on producers, particularly last Christmas, when "a vegetable war" broke out with bags of sprouts and carrots being sold for as little as 5 cents.

"It was ridiculous," he fumes, adding that almost all of their veg is grown in Ireland - unlike most competitors.

"We have to be competitive, but there are certain things that were not appropriate that was one of them.

"I heard some (dairy) farmers say it was brilliant, but they realised if this was milk it would be different.

"We left our prices at a more reasonable price." Instead, SuperValu charged 19 cents and donated 14 cents of that to charity, raising €100,000 for Focus Ireland.

"We wont be doing anything that insults our producers," he adds, despite many suppliers disagreeing in the past.

"I think consumers appreciate that and recognised what we did."

Kelleher in brief

Position: MD of Musgrave Retail Partners Ireland (MRPI) since December 2010, in charge of SuperValu and Centra.

Education: BComm from University College Cork. Member of the Institute of Chartered Accountants.

Family: Two daughters and a son with wife Rosemary

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