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€284 million investment brings Irish jobs total to 35,000

Dublin – Musgrave Group, partner to entrepreneurial food retailers and foodservice professionals across Ireland, the UK and Spain today announced its financial results for the year ended 31st December 2011.

The Group reported sales of €4.5 billion up 1.6%, delivering a profit of €71 million 1% below last year. Debt increased from a net cash position of €21 million in 2010 to €187 million at year end following the acquisition of Superquinn.

Commenting, Chris Martin, Musgrave Group chief executive said: “Despite the economic challenges and a consumer that is focused on spending less, we have delivered a good performance with turnover and profit remaining steady for the third consecutive year. 2012 continues to be tough but our brands are performing well, benefiting from customers who want to shop locally for value.”

“The past three years have brought profound and permanent change to the grocery sector in each of our markets. Against this backdrop, we initiated a transformation programme to strengthen our brands and to improve the competitiveness of our business. Through brand innovation, investing in consumer insight, improved partnership with suppliers and a sustained focus on cost reduction we have delivered better value to consumers.”
 

Investing In Ireland

“Together with our retail partners in SuperValu, Centra and Daybreak, we invested €284 million in Ireland in 2011 in store openings, refurbishments and acquisitions. This investment programme helped to increase the number of people employed by Musgrave and our retail partners to 35,000 which is almost 14% of the total number of people working in the retail sector in Ireland.”

“This commitment to supporting Irish SMEs at a community level is a compelling point of differentiation for our brands. Last year we spent €1.75 billion on Irish sourced goods and services. We are building on this commitment by creating opportunities for Irish companies in the UK. Our Groupwide own-brand strategy is providing 33 Irish suppliers with additional retail sales to our UK network of stores.”

“Our agenda of bringing fresh food leadership, range innovation and value to all the communities served by our retail brands has delivered for SuperValu, Centra and Daybreak in Ireland. SuperValu achieved retail sales of €2 billion. By continuously adapting its offer to a more budget conscious consumer, Centra significantly outperformed the convenience market with retail sales of €1.4 billion while Daybreak added 36 new stores and together with DayToday achieved €300 million in sales.”

“Our focus on developing our business in Ireland extended to our €229 million investment in Superquinn which increases our market share in Dublin to 22%. Superquinn’s legacy of fresh food, customer service and support of Irish suppliers represents a good fit for Musgrave. On completion of the acquisition in October 2011, our immediate focus was on stabilising the business which has been severely impacted in recent years by changes in the marketplace and declining consumer spending. We are now working on the long term integration plan for Superquinn with an initial focus on assessing how we best leverage its heritage in innovation and fresh food while applying our expertise in range and own brand development.”

Performance in Great Britain

“In a challenging retail market, we have continued to make progress in Great Britain with our Budgens and Londis brands achieving retail sales of €2 billion in 2011. We have been investing heavily in value by cutting the price on thousands of products while improving the quality and depth of range in our 2000 Budgens and Londis stores. Investment in brand development and innovation helped us to deliver on our recruitment targets with the number of Londis retailers increasing by more than 100 bringing the total to 1879.”
 

Outlook

“The outlook for the Group for 2012 remains challenging especially in Ireland where we expect to see little to no growth in the grocery market. Nonetheless our brands are performing well with positive sales growth in both the Irish and British markets.

For 2012 we are continuing to improve the quality and depth of the offer for shoppers with the introduction of the SuperValu Own Brand range in Ireland and the UK. Initial customer indications are good with a 15% increase in Own Brand sales. We are forecasting to achieve €1 billion in Own Brand sales across the Group by 2014.”

“Through our transformation programme we are now a stronger more efficient business with market leading brands and the agility to respond quickly to changing consumer demand. We have put in place medium term debt facilities as well as a long term private placement which has given the Group available facilities of €435 million. Together these elements are providing us with the solid foundations to support our retail partners and to deliver sustainable growth.”

“Going forward, our focus will remain on investing in price for an increasingly budget conscious consumer and working with our retail partners to ensure
innovation and value are at the heart of our offer. Through ensuring that our brands are different and better, growing in our core markets and driving efficiencies in every aspect of our business we are confident of delivering sustainable growth for Musgrave and our retail partners.”

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