Musgrave – NI expansion continues into 2020

Making the most of opportunities in a vibrant convenience sector, NR talks to Michael McCormack Managing Director of Musgrave in Northern Ireland about future growth and development.

Interview by Neighbourhood Retailer staff writer, Julie Nash

“Brexit created a sense of uncertainty, however the convenience sector is uniquely vibrant” explained Michael McCormack. “We’ve had a team looking at Brexit for the last few years and while we still wait to see the detail of the deal and the implications for Northern Ireland, we are well prepared for whatever happens.”

“With lifestyles changing and people looking for convenience more and more, this is creating opportunities for us. We’ve been investing – despite the Brexit uncertainty – upgrading existing stores and adding eight new stores in Northern Ireland such as the new Centras in Donegall Square East and on Bradbury Place in Belfast.

“The opening of the new SuperValu at Fruitfield in Richill, formally a EuroSpar, is now owned and operated by the Woods family, was a milestone in 2019 – bringing the total Musgrave stores for Philip and Neville Woods to four stores. The new Patterson’s Centra on the M1 near Dungannon is another excellent example of further expansion within the Musgrave portfolio.”

The year ended on a high with further Centra stores opening on York Road Belfast and at the Millennium Forum in Derry~Londonderry and refurbishments at Islandbawn and Clogher.

Investment

“2019 saw significant investment with growth across our SuperValu, Centra and MACE brands. We worked with our independent retail partners supporting them to refresh their stores while also investing in our company owned stores. A £1 million investment in our flagship SuperValu store in Lisburn is an excellent example of this.”

In recent years, Musgrave has re-invested in developing and refreshing its MACE brand, through a Store of the Future concept focusing on fresh and food to go. MACE Toomebridge was the first to unveil the new concept with great success and 2020 will see that rolled out further across the MACE network.

Michael explained that brand developments are predominantly retailer led.

“Our retail brands – SuperValu, Centra, MACE – are continuing to thrive and develop. We have a strong working relationship with our retail councils. These are representative groups of our retailers, and their input is crucial to help us further develop the brands.”

Musgrave has also been developing and investing in its cash and carry business, Musgrave MarketPlace. Around £1m was invested in the MarketPlace Derry~Londonderry, and similar investment in the Duncrue branch – which is now open to the public for the first time.

Food service

Another major move in 2019 was the acquisition of Drinks Inc. (which continues to operate as a stand-alone business). Established in 2001, Belfast based Drinks Inc. is one of the largest and fastest growing independent drinks distributors on the island of Ireland. With a portfolio of over 1,000 products, Musgrave acquired the business from Paul Camplisson, who will remain on a consultancy basis, working with Musgrave to grow Drinks Inc. further.

“Drinks Inc. has a long tradition in Northern Ireland with the on and off licence trades. It was a strategic move for Musgrave with the alcohol market presenting a great opportunity.”

Brand development

Retail is a competitive market, but Musgrave has strong and established brands, as well as continually developing new concepts.

“A brand is only as good as the experience of the consumer, therefore our focus for all the brands is to satisfy and ultimately delight the consumer.

“The success of our Frank and Honest coffee brand is a good example. It is a fantastic offer that is now available in 750 SuperValu, Centra and MACE stores across the island of Ireland. It is now the number one coffee brand on the island, born from an understanding of what the customer wants and what the retailer needs.”

Musgrave has a full team dedicated to the Frank and Honest brand alone. From the outset, the team carried out research and taste profiles – focusing on how to deliver a consistently good cup of coffee.

Basics

Even when developing a new brand or concept, Michael explains that it all boils down to the basics – the right product, at the right price, in the right location with the right people.

“When we look at developing our brands, we take a four-quadrant approach – first of all the people; then the products and services; thirdly the communications and finally, the environment.

We have an excellent brand engagement programme, training our retailers in providing excellent customer service alongside our Breakthrough training for our colleagues in head office. Encouraging them to be the best that they can be, thereby improving both the business and the individual.

Communicating with our customers is key but ensuring we are targeting them in the right way is imperative. We’ve taken a lot of the spend on traditional leaflet distribution and reinvested it into digital platforms and radio.

And because people want a bright, open environment wherever they shop, we have therefore invested significantly in store design and branding over the past three years.”

Concepts

Michael is optimistic about various new developments and growth opportunities in 2020 and beyond.

“There are several live green-field and brown-field prospect sites as well as major opportunities in Northern Ireland for our concepts such as Moo’d ice cream, Green Kitchen (Centra’s salad offering) and a new pizza concept, Pizza Caramico which are all showing success in the ROI stores. There are two standalone Frank and Honest cafes in Dunboyne and Dublin and we are considering opening Northern Ireland’s first coffee shop under the brand in Belfast.”

“On the foodservice side of the business, along with Drinks Inc, there is La Rousse Foods, acquired by Musgrave in 2017 and also operating as a stand-alone business.

“We can bring so much more to any hotel, restaurant or bar offering anything from every day to premium foods to drinks – we can offer the full package now and will focus on making this work for our customers.”

What’s next in Food to Go?

The Frank & Honest brand has been a landmark success for Musgrave – so can they predict the next big thing?

“The Moo’d instore concept for ice cream (soft scoop, Gelato, whipped) is fantastic” said Michael. “So far there are only two in Northern Ireland but over 200 in ROI, so we are planning a significant rollout across our network this year.

“The biggest macro trend in food to go will be health. Our Green Kitchen concept offering fresh chopped salads is set for major growth. The demand for vegan options is stepping up and sustainability is increasingly important. Developing apps, and thereby generating customer loyalty, is also important – for example apps for Frank & Honest, or a Beat the Q.”

Corporate social responsibility

Corporate social responsibility is important for all divisions in Musgrave.

“Our ambition is to leave a positive and lasting legacy for future generations, with a clear and committed approach to sustainability in every area of our business and by taking our partners on this journey with us. We’re fully committed to this and were recently named a Sustainable Development Goal champion for 2019-20. We are looking at all our packaging to make it sustainable such as our Frank and Honest coffee cups and our compostable shopping bags now in SuperValu and Centra stores – this is what the younger generation is increasingly concerned about and something that is central to our business plans.”

“We’ve been recognised for our work with our charity partners, most recently being awarded the CSR award at the AIB Business Eye Awards for our partnership with Action Cancer. This partnership supports the Big Bus and the Health Action Programme through our SuperValu and Centra retailers and has raised over £3 million to date. MACE and MarketPlace have also raised over £200,000 for Chest, Heart and Stroke.”

Awards are important for Musgrave because they recognise the investment and dedication of both their retailers and brands – the group has picked up various titles at the Neighbourhood Retailer Awards.

Responding to consumer demands

Keeping ahead of trends and changing consumer habits is paramount.

“It’s about food leadership and health, rolling out new concepts that respond to what consumers want, whether that’s meat, food to go, meal solutions, or alcohol.

“Value is critical. The economy’s flat, there’s a squeeze on incomes, we need to continue to bring relevant value – whether that’s investing in weekly promotions, providing quality own brands at 40% cheaper or monitoring competitor prices.

“On an operational basis, the opportunities that digital presents to making life easier for the consumer is important – such as rolling out self-scan checkouts.

Looking ahead

“For any business the most important focus should be on looking after their customers and their colleagues. Ultimately, it’s about doing the basics well – the right product, at the right time, in the right place at the right price. Alongside that, you need to continuously innovate and develop new ideas, but not at the expense of the business or customers.

“My new year message for 2020 would be – keep doing the basics excellently. Look after your colleagues and they will look after you. It really is that simple”.

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