Musgrave NI 20th Anniversary – MD Michael McCormack on the company’s success

As Musgrave NI celebrates its 20th year in the Northern Irish market, Managing Director Michael McCormack takes us through the business’s most significant moments.

Michael McCormack earned the top job at Musgrave NI in late 2015, but has spent many years at the company as an integral part of its success.

Now, overseeing four of Northern Ireland’s most successful brands –SuperValu, Centra, Mace and MarketPlace – he is looking carefully at the future.

Speaking to Neighbourhood Retailer at the company’s 20th year in Northern Ireland, Michael considered some of the watershed moments in local retail since Musgrave’s arrival.

“When you look back, the entry into the market by the multiples was an important moment,” Michael said. “Tesco, Asda, Sainsbury’s; then lately the discounters like Lidl and Poundland brought a different dynamic. They would be the most significant changes, outside of the changes in consumer behaviour.

“We have seen a decline in the larger format supermarkets. Multiples were building bigger and bigger stores, and it’s true that the eventual emergence of the ‘hyperstores’ was driven by the consumer. But the reality is that over last four or five years, that consumer is changing yet again, leaving those large supermarkets to face new difficulties.”

Michael explained that ‘little and often’ shopping and aversion to waste was now driving the market in the opposite direction, and into the hands of independent retailers.

In July, Musgrave NI revealed it planned to buy more stores in Northern Ireland in a bid to become “the market leader in convenience”, pumping £60 million into its network.

While current economic volatility has delayed investment by some retail groups, Michael McCormack said Musgrave NI is aware of the risks, but also of the opportunities.

“Any investment comes with a level of risk,” he told Neighbourhood Retailer. “But Northern Ireland is a great opportunity for Musgrave. There’s a good return to be had.

“Some in the Republic talk about Northern Ireland being a tough market. I don’t think that’s true. I’ve lived here for a number of years and have a sense of the people and the market. If you are able to focus on the right things, there is a good opportunity.”

Northern Ireland may be rich with opportunity, but the effect of Brexit and pressures from the fall in the value of Sterling are only just emerging.

But the Musgrave NI MD is confident the business is on the right track.

“We have two perspectives on Brexit,” he said. “Short term, the exchange rate volatilities are not an issue. Most of our products are sourced locally so pressure can be managed, so we can deal with that short term challenge.

“Long term, it’s unclear what the effect on Northern Ireland will be. We are looking closely at the forecasts, but no one can predict what will happen in the end.

“But it’s the shift to convenience shopping where we still see the opportunity.”

Part of seizing those opportunities has been Musgrave’s model stores, representing the fruit of the investment plans so far. Stores like the much-talked-about Centra Cathedral Quarter, feature unprecedented food-to-go options, and represent a major step-change not just for Musgrave, but for the modern convenience sector.

According to Michael, the new approach to food-to-go not only caters to changing consumer behaviour, but also offers a new customer experience.

“What’s happening is a blurring between food service and retail,” he said, explaining that food-to-go is now an integral part of Musgrave’s business model.

It’s a fast-moving sector, and Musgrave is ensuring it can react quickly to changing tastes.

“What we see is that food trends are generally led by the restaurant trade,” Michael said. “But now it can very quickly move into a retail setting.

“Mexican, for example, has been a big trend in food service for a number of years, so we have the Burrito Bar in Centra Cathedral Quarter. New ideas and concepts are coming more quickly now, especially since we moved out of recession.

“The pace of retail has had to adapt to tackle these changes.”

Michael also revealed Musgrave’s latest franchise in the food-to-go category, Chipmongers. The traditional take-away franchise will soon begin trading in the Republic before being rolled out in Northern Ireland. It will join the company’s wide range of new healthy options being extended into the North.

Mr McCormack is hoping the new franchise and food offer will join the long list of Musgrave’s successes over the years. For Michael, the biggest of these is the business becoming the number one retailer in the Republic of Ireland with SuperValu.

But while being the country’s top retailer is a significant achievement, it’s the links built between Musgrave’s many independent retailers and their local communities that Michael believes will leave the biggest legacy.

“Our stores are embedded in community, and that’s very important to us,” Michael said. “They’re part of the fabric of society, and that’s had the biggest impact.”

“We had a group of retailers together during our recent Retailer Showcase. They really know their customers, many by name. At end of the day, we’re all human beings and that connection is vital.

“One of the managers spoke about an elderly lady who lives in housing estate nearby to the store and is housebound. She rings across a list and the guys in the store pick those products and take them over to her, have a cup of tea and a chat. It’s her only way to access the outside world.

“It’s a good example of what it means to be part of local community.”

Any great business also has to be cognisant of its weaknesses, and for Micheal, Musgrave’s failure to hold onto its Budgens and Londis brand in Britain had been regrettable.

“Those sides of the business were acquired by Booker last year,” he said. “That took a lot of management time, and it’s an area where we could have done better.

“But we’re in a good place. We’re able to take advantage of a lot of opportunity, and growth is now our focus, which is great.”

So with the business headed in the right direction, we asked Michael what Musgrave NI’s ambitions are for the next 20 years.

“Our stated aim in the medium term is this – to be the number one consumer choice for convenience and food shops,” Michael said. “We aim to have that in place by 2018. Our plan is to grow and move in line with what both consumers and retailers want. To do that, we have to be ahead of the curve.”

Leave a Reply

Your email address will not be published. Required fields are marked *