Business Irish

Friday 24 May 2019

Grocery war as Dunnes Stores launches online food shopping

Dunnes Stores
Dunnes Stores
John Mulligan

John Mulligan

DUNNES Stores is getting ready to launch an online grocery delivery service in a major move that will shake up competition among Ireland's retailers and could spark a price war that will benefit consumers.

Dunnes - the second-biggest grocery retailer in the country with 155 stores - has described the online move as a "significant development".

It is hiring a number of key executives who will be responsible for rolling out the service.

It will almost certainly be initially restricted to a small geographic area so that any issues can be ironed out before the service is launched fully nationwide.

But the chain - headed by Margaret Heffernan and Frank Dunne - hasn't revealed when it plans to make the online service available for customers.

Two senior executives to be hired by Dunnes will have significant responsibility in rolling out the new service.

The online grocery operations manager will develop the company's online grocery shopping training material and processes, as well as training all the staff who'll be working for the online service.

The retailer is also hiring an online logistics manager who will oversee everything from the delivery fleet that will be used by Dunnes, its fuel costs, planning and managing delivery slots, and a range of other elements of the new business.

Dunnes, which has sold clothing online since 2013, will be the last of the three big chains to offer online grocery shopping in Ireland.

Tesco - Ireland's biggest grocery retailer - launched its service here in 2000, while SuperValu, which is controlled by the Cork-based Musgrave group, started home deliveries in 2011.

Superquinn, which was bought by Musgrave in 2011 and whose stores have now been rebranded as SuperValu, also launched its online grocery service in 2000.

According to retail and business adviser Keith Harford, online grocery sales in Ireland account for about 6pc of the overall multi-billion euro annual market, but it's increasingly popular with time-pressed consumers.

Mr Harford, who helped to launch Superquinn's online business, said Dunnes Stores would face a number of hurdles in launching its new service.

"First of all, it's costly. It won't make money overnight. Secondly, it's very much a customer-focused service. It's not that Dunnes has bad customer service, but it's not a core part of their ethos."

He added that a restricted launch of the service could probably be done at a cost of between €5m and €10m, but that making it available countrywide would possibly involve more than a €30m investment.

Tesco's online service in particular has been a significant success for the retailer here, despite its overall sales in Ireland falling in recent years.

Former Tesco group chief executive Philip Clarke last year singled out the strong performance of the retailer's online service, particularly around Dublin, as a bright spot for the company in an otherwise challenging market.

Dunnes Stores didn't reply to a request for details regarding a planned launch date for the service.

Irish Independent

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