Martin's vision for Musgrave by 2025
After buying Donnybrook Fair, Musgrave CEO Chris Martin has big plans for the convenience group
Chris Martin says that Donnybrook Fair has been on Musgrave's radar for several years, but to the outside world it was quite a shock when the owner of the SuperValu and Centra brands swooped in to buy the swanky food business. The €25m deal made people pay attention, not only because Dunnes Stores had for several months been seen as the frontrunner to acquire the Dublin-based chain of five stores, but because it was such a clear statement of intent from Musgrave.
Donnybrook Fair, says the chief executive of Musgrave, will help the "food leadership" of the company. "It's a great addition, a business that really carries a high end food credential, in terms of its products and its recognition. And for us that's very much around targeting the high end grocery market."
It is part of a wider strategy that Martin has been developing for some time. His vision for the business up until 2025 is based on expectations for significant changes for the eating habits of consumers. According to Martin the population will have grown to over seven million, with Dublin and Belfast home to more than 45pc of the population.
Although online shopping and technology will play a much bigger part of shopping in the future, Martin believes there will be demand for even more stores and the requirement for around of 1.5m sq ft of additional space. As is happening already, many will incorporate cafes and other services, making them social hubs.
He also believes there will be "a dramatic shift in people's attitude to food".
"Consumers will seek out unique food experiences where eating less will be considered good for me, my health and the health of the planet. Veganism will be mainstream and consumers will make more informed decisions about the health and nutritional benefits of what they buy, coupled with growing concern for the environment and the sustainability of the food ecosystem. People will demand total transparency about the impact of food on their health and on the planet."
With this in mind, it seems obvious why Musgrave was keen to buy Donnybrook Fair. For now, he says the company is focused on understanding the new acquisition - but he does expect more Donnybrook Fair openings. "Firstly, there's a bit of investment needed. When we look at Morehampton, that store hasn't been refurbished for 17 years. So that brings a real opportunity.
"We have SuperValu in the multiple market, Centra in the convenience market, and Donnybrook very much brings us into the high end, particularly in Dublin." It also has a wholesale business, Marketplace.
The strategy reflects a two-track trend in the market where premium and restaurant food is in demand, while cheaper supermarket prices are also expected. "The overall market is very much value driven," says Martin.
Growing up in Yorkshire, England, he learned first hand the importance of reinventing yourself in business. Martin's father was an engineer who later became an owner of residential homes for older people. "In the Margaret Thatcher years he lost his job two or three times and decided to put his money in something that would grow.
"Seeing someone who went from an engineering background into his own business, with its trial and tribulations, and then you talk to retailers today how are going through the same, you have a strong empathy."
Upon leaving school he felt that economics and accountancy studies would be a safe bet in college and he then trained with Coopers and Lybrand's Leeds office, working with clients ranging from British Steel to Austin Reed. His first retail role was with British supermarket Asda, working in finance and the supply chain. "It was going into food retailing at a time when Asda was going into hypermarkets and the move from the high street to large out-of-town stores," he says.
Martin went on to join Pizza Hut, which was owned by PepsiCo, as finance director. He was there from 1992 to 1996, during which time he was involved in opening 500 restaurants. "It was in the early days of fast food which was great learning for where I am now," he says. He then joined a business called Storehouse, which housed retailers such as Habitat, BHS and Mothercare. "I started off in Mothercare and then became Storehouse finance director. It was great for a few year, but then was hit by the changes in fashion. I ended up becoming the CEO of Mothercare but, in getting that, I had to work with the executive chairman to sell BHS."
Around the time Martin left Mothercare, Musgrave had bought the grocery chain Budgens in the UK and was looking for a finance director.
"The business amazed me, it's a family business and also very down to earth and very energetic," says Martin. Within a few months he was asked if he would be interested in taking the top job in at the symbol group and became CEO in 2004.
The company is now majority owned by the extended Musgrave family, many of whom have little day-to-day involvement with the organisation. Yet Martin says that the family is very supportive of the company.
"For instance, in September we had a next-generation meeting down in Cork. I went and talked about the business, they went and spent time together talking to people and learning about the business. All of which comes down to a great philosophy which is the accountability and responsibility of ownership - this is part of your heritage and very much treated as such and I think the family do a lot of work to make sure that they and people coming into the family understand that," he says. There have been tremendous changes in retail over the past 14 years. "The rate of change has been significant," he says of his time as CEO.
Last year, the company delivered an €80m profit and a turnover of €3.7bn and has grown in 2018.
"We had good growth this year. So, as we sit with a couple of weeks to go to the year end we're seeing growth about 3pc in our turnover this year," says Martin. It is a competitive environment and while Musgrave is branching out with new acquisitions - it also bought specialist restaurant supplier La Rousse - it is competing with Dunnes Stores which is similarly acquiring specialist food businesses, such as James Whelan Butchers and Cafe Sol.
Martin points out the Musgrave, with the support of the company's franchise holders, is having success in developing its own brands.
"If you look at the development of the SuperValu brand, we've put in place significant investment in developing our brand - so take Frank and Honest. Frank and Honest is a brand where we put a coffee business unit team together just over two-and-half years ago,and we started to roll out Frank and Honest two years ago. It's now the largest coffee brand in Ireland, turning over €50m and it's doing 440,000 vends a week."
Musgrave has just launched a new pizza brand, Caramico, which aims to take on the artisan-style pizza restaurants now popping up in cities around the country with its stone-baked bases and premium toppings such as Fior Di Latte mozzarella.
According to Martin, the franchise model is a bonus when it comes to launching new concepts.
"We've got some of the best retailers in the world. Having their input, working together to shape very much what that offer is, rather than having someone dictate it from head office, has enabled us to really drive these brands quickly."
Martin says the company has made preparations for Brexit, whatever the outcome. "Say Brexit does happen, the reality of it is the UK being outside of Europe will mean that there are tariffs. It will mean that a product that's imported into Ireland from the UK will have a range of tariffs, ranging from zero to whatever. The way we're working on that is to say 'Well, actually the Irish economy is strong, it can withstand the fact that Ireland's largest trading partner will leave the EU'.
"We're working through how to ensure that prices are properly managed. And that has meant some decisions around where we source our product from. So rather than taking it from the UK, we may be taking it from Europe."
But Irish suppliers may also benefit. "Musgrave is an Irish business. It sources a lot of its product from within Ireland. So we are better protected than most. I've met with many of the branded suppliers and they're looking at different ways of bringing product into Ireland, to make sure that Ireland doesn't suffer as a result of Brexit, bringing it in from France or Holland."
Regardless of the threat of Brexit, Martin has big ambitions for the group and will buy more businesses - if possible, "as brands become available and if we can see that they can grow and fit with this ambition of growing good business. The reality of it is and there are not many opportunities available."
In the meantime, he is focused on his vision for 2025. "You will see more store openings across all of our brands. You'll see the element of innovation coming through as we roll out some of these concepts like Caramico.
"We're working on our range, particularly around vegan and organic. And you'll see the work on digital, particularly, coming through in SuperValu and MarketPlace because what we're seeing is a real opportunity to grow online."
Name: Chris Martin
Position: Chief executive of Musgrave
Lives: Family home in London and a house in Kinsale, Co Cork
Education: Newcastle University
Previous experience: Held roles in Coopers and Lybrand, Asda, Pizza Hut and Mothercare.
Family: Married to Joanne, son John, daughter Natalie and grand-daughter Lottie
Favourite film: A Good Year
Favourite book: Anything by Jeffery Archer
What advice do you have for people interested in getting into retail?
It’s a great industry — it is continually evolving and it provides a superb opportunity. It’s a great place to work and with some of the trends that are out there and some of the changes it provides a good career. I’ve had a great career in retail.
What advice to you return to regularly?
There are two things — don’t forget the everyday and also look for the opportunities.
Sunday Indo Business