Wednesday 25 April 2018

Operational control of Dunnes Stores undergoing perhaps biggest change in over a generation

Margaret Heffernan of Dunnes Stores. Picture: Donal Doherty
Margaret Heffernan of Dunnes Stores. Picture: Donal Doherty
John Mulligan

John Mulligan

Operational control of Dunnes Stores - Ireland's third-largest grocery retailer - is undergoing what is arguably its biggest change in more than a generation, as matriarch Margaret Heffernan increasingly cedes much of her hands-on role at the dynasty to her daughter, Anne.

Anne Heffernan (49) and Margaret Heffernan's niece, Sharon McMahon (47), have both just been appointed directors of all Dunnes Stores companies.

While they've both been involved in the secretive Dunnes Stores business for some time, industry insiders say that Anne Heffernan is now the de facto leader of day-to-day operations, especially on the food side. Sharon McMahon is understood to be running the retail group's property and investment interests. She has previously been reportedly involved in the textiles side of the retailer.

The company did not respond to a request for comment.

For years, there has been continuing speculation about whether Dunnes Stores could be sold, or if a new generation would gradually succeed Margaret Heffernan (75) and her brother, Frank Dunne (74), who for decades have been the duo in charge at the business.

The recent raft of directorship appointments across the group companies, and Anne Heffernan's deep involvement in operations, now appear to cement a strategy to see the chain remain in family control.

Anne Heffernan qualified as a doctor, but has long been in line to take over the reins at Dunnes Stores. Sharon McMahon is a solicitor and worked with Irish law giant Matheson Ormsby Prentice before dedicating herself to the family retail chain.

Ben Dunne Snr, Margaret Heffernan's father, opened the first Dunnes Stores in 1944, on Patrick Street in Cork.

In the following decades, it expanded significantly, and established a presence in Northern Ireland, Britain and Spain.

It has almost 160 stores and generates annual sales in the region of €2.6bn.

According to the most recent figures from research group Kantar Worldpanel, Dunnes Stores has a 21.1pc share of Ireland's multi-billion euro grocery market based on the value of sales.

That puts it in third place behind SuperValu, with a 22.2pc share, and Tesco with 22pc.

The Irish grocery market is extremely competitive, with German retailers Lidl and Aldi building a significant presence here and snatching market share from rivals.

While Lidl has a 12pc share of the market based on the value of sales, and Aldi has 11.5pc, it's reckoned that the pair are probably the biggest players in the Irish market in terms of the volume of grocery sales.

Lidl and Aldi have expended significant effort in building relationships with Irish food companies, helping them to develop product ranges that are not only sold in their Irish outlets, but exported to the chains' stores across Europe.

Both chains have continuing expansion plans for Ireland, which will heap more pressure on Dunnes, Tesco and Musgrave-controlled SuperValu.

Dunnes Stores has developed a more up-market range of products and in 2016 purchased craft firm James Whelan Butchers.

Dunnes bought the small coffee shop business Café Sol in 2015. Dunnes also reportedly looked at buying Avoca, which was sold to US giant Aramark for about €60m in 2015.

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