Sunday 18 February 2018

Kelleher sees Valu in being Super as it hits No 1

Tesco overstated its first half profit by £250m.
Tesco overstated its first half profit by £250m.

Supervalu boss Martin Kelleher isn't getting carried away. SuperValu has just passed out Tesco to become the country's biggest supermarket chain, according to Kantar figures last week.

His management team didn't go wild on the sherry. "Genuinely no, we're a firmly grounded group of people," he told me. "It's only taken 37 years but it's great that we are number one. However, it's the outcome of what we've been doing rather than an end goal. People are proud that a local Irish company took on a large multinational - and won."

Tesco's incoming CEO Andrew Yaxley, who arrives from London this month, has got a slugfest on his hands if he wants to retake the top slot. The economy is recovering - but "not as dramatically as you'd expect", Kelleher warns.

"We are seeing an increase in baskets in some cases. It's not a sea change but it's more positive. You see it on special occasions," he told me. "It's in premium wine too, where people were spending €10 on a bottle might now spend €15...but I wouldn't overplay it."

The recovery in retail is mirroring that of the general economy. In other words, it hit Dublin first and is slowly spreading across the rest of the country, he added.

"Dublin is in a good place. It didn't fall as far as other locations."

SuperValu is growing its sales by "single digits" and plans to open another 3-4 stores across the country over the next 12 months. There's an awful lot more growth to be squeezed from the old Superquinn outlets too.

While Tesco will renew its challenge when Yaxley's boots hit the ground, Kelleher also has his beady eye on the German discounters Aldi and Lidl but predicts a slowing of their market share blitzkrieg.

"Everything plateaus and things go in cycles. We're seeing that they are not for everyone. They are limited range discounters and people vote with their feet."

The SuperValu boss sees Aldi and Lidl's combined market share peaking in "the mid 20s" but cautions that it's only a guess. At the moment they have about 16.9pc. Tin hats on. This is going to be bloody.

Sunday Indo Business

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