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Retail News|October 2013||45

44|Retail News|October 2013|

ECR Ireland Annual Conference

ECR Ireland Annual Conference

Pictured are Conor Kilduff, Keelings; Gary Desmond, Gala CEO; Tony Cluskey, Marketing & Promotions Manager, Gala; Alan Freehill, Grocery Channel Manager, Johnson & Johnson; and Eoin Kellett, Head of Sales, Convenience Channel, Mondelez Ireland.

Pictured at the ECR Ireland Annual Conference are Mike Byrne, CEO, GS1 Ireland; Prof John Fitzgerald, ESRI; and Declan Carolan, General Manager, ECR Ireland.

Leading the Way to Growth The Leader’s Congress was the title of the recent ECR Ireland Annual Conference, which sounded a cautiously optimistic note for Ireland’s FMCG sector. THE 2013 ECR Ireland Annual Conference took place in the Guinness Storehouse recently, with the title, The Leader’s Congress, considering the major leadership issues for the consumer goods sector in Ireland. The conference contained notes of both optimism and caution, many of which were expressed in the opening address to the conference by Minister for Finance, Michael Noonan, TD. “Your companies and organisations have been working through a very challenging business environment, one where your sales volume and margins

have been adversely affected,” the Minister told attendees. “Irish households have large levels of debt and low spending. Even households with relatively healthy finances have reigned in their spending. “We want recovery but we do not want to return to a boom economy based on the unsustainable growth of the past, but to create a healthy economy based on sound fundamentals. This year has seen the domestic labour market improve, with the second quarter of 2013 showing strong employment growth and that should help consumer

confidence and spending.” Minister Noonan noted how internationally, Ireland is seen as “a country that has tackled very serious problems in an effective manner and importantly, the markets are beginning to agree, as seen in our bond yields”. Noonan stated his desire to see “a position where Ireland moves from being the strongest of the weak economies, where we are now, to the weakest of the strong economies of Europe. As business leaders, you play a vital role in that by your investment and job creation and as a Government, we will look

The Leader’s Congress was opened by Minister for Finance, Michael Noonan, TD.

to support you by injecting confidence into Ireland and the Irish.” Balanced Assessment Professor John Fitzgerald from the ESRI provided attendees with a very balanced assessment of the current climate and possible future changes. Domestically, both households and the Government have continued deleveraging and on one of many notes of optimism at the conference, he suggested that 2013 may be the last austerity budget the country has to face. The possible economic conditions that the country faces in the next few years depend very much on external conditions. If there is another significant shock to European economies or the US, then the outlook for the domestic market would be bleak. However, on balance, Prof. Fitzgerald was hopeful that a more optimistic scenario, with EU economies showing growth of 3% to 4% for the 2015 to 2020 period, would lead to growth in the domestic market. On a strong cautionary

note, Prof. Fitzgerald told the conference that if we do see a recovery, this country needs a stable, profitable banking system that is capable of lending to customers. He also said that there is a scenario where Irish taxpayers may yet have to give the banks more money, although that is relatively unlikely. But he stressed that it is vital if Irish companies are to take advantage of any recovery, that Irish banks are extending them credit to do so. Some positive figures that point towards recovery are the significant falls in unemployment figures last year. Prof. Fitzgerald said that there is even a scenario that sees us at full employment again by 2020. 2020 could also see Ireland’s debt to GDP ratio fall to 100%, he revealed. In short, the ESRI described a number of possible outcomes for the next five to 10 years, from a zombie Europe with a lost generation of young workers, to one where the EU has completed almost full recovery by 2020. The Irish domestic market depends heavily on what

Edel Russell, Consumer and IT Director at Musgrave Retail Partners Ireland (MRPI), pictured addressing delegates.

happens internationally but at the moment the figures are giving reasons for optimism. Brian Donaldson, Chief Operating Officer, The Maxol Group, explained how the petrol retailer and forecourt operator had cash in hand, rather than debt to manage during the recession, which saw Maxol investing €66m over the last few years.

Summer 2013 was extremely good for the group and consumer spending was strong. In general, the last 12 months has seen the end of the fall in spend, according to Donaldson, although he did point out that there was a significant fall in sales in April when the property tax bill was paid and that next year, consumers will be hit with twice the amount.

Retail News|October 2013||47

46|Retail News|October 2013|

ECR Ireland Annual Conference

ECR Ireland Annual Conference ship is so successful that the MACE/Maxol on Dublin’s Sandyford Road has been shortlisted for the International Convenience Retailer of the Year Award, proving once again that indigenous Irish companies are capable of competing with the very best in the world, recession or not.

Jill Ross, Unilever Ireland Managing Director, addresses delegates at the ECR Ireland Annual Conference.

Overall, the message was one of optimism. Maxol has reopened some stations that closed during the recession and it is currently engaged in four re-openings. The recovery in car wash sales, a luxury sale in the forecourt sector, shows that customers are beginning to spend on more than just necessities, he explained.

The partnership between Maxol and MACE has proven hugely successful. A new “moreish” concept is set to be introduced to MACE/Maxol forecourts and set a new standard for food-to-go. This sort of collaboration between business partners like Maxol and BWG is proving increasingly important in this sector and this particular partner-

John Freda, Managing Director, JTI Ireland, addresses the Conference.

Sustainability and FMCG One of the key topics addressed by David Keeling, Managing Director, Keelings Retail, was sustainability. He stressed its importance in the food sector not just for brand image but also for cost savings. Keelings’ combined heat and power plant, its dedication to reducing food miles by producing food in Ireland, its waste composting, glasshouse energy conservation screening and water conservation techniques are not only part of an ethos of sustainability but they have created significant savings for the company, Keeling revealed. During the course of the recession, Keelings has moved from the role of supplier to that of a brand that actively engages with the consumer, thus meeting the desire of Irish consumers to engage with an Irish producer with a strong indigenous brand. Indeed, so successful has it proved that Keelings is now ranked at number 36 in Kantar’s Most Chosen Brands 2013.

Vincent Jennings, CEO of the CSNA, is pictured with Jane Ryan, Category Manager, Topaz.

In the UK scheme, companies like Unilever, as well as, critically, small indigenous companies, have so far engaged with more than 10,000 participants and in partnership with the Job Centre Plus government agency, have created a programme that delivers for the companies that participate as well as young people. In Ireland, the programme will be run in partnership with Intreo and it is hoped that the success of the programme in the UK can be repeated here. A large number of companies in Ireland have already signed up to the programme, which is critical in order to repeat the success in the UK.

He also commented on Keeling’s desire to further refine retailer-supplier collaboration to reduce food waste in the supply chain. With some 30% of food going to waste before the consumer gets access to it, Keelings will continue to work with retailers to address sourcing and planning issues and through improved forecasting, they will be able to reduce delay in supply, all in an effort to minimise waste and unnecessary costs. Tobacco: The Burning Issue Tobacco is a primary driver of footfall to shops. It is also one of the most heavily regulated and taxed products behind the counter. Smokers typically deliver five trips to a shop every week and to retailers, that means increased number of chances for additional sales, explained John Freda, Managing Director, JTI Ireland. The cost of a packet of cigarettes has increased dramatically. Freda pointed out that Irish consumers have proven very price inelastic, with demand here higher than in Germany, where the price of a packet is significantly lower. Recent years have seen a large increase in sales of Roll-Your-Own tobacco, given the price difference. We are likely to see Roll-YourOwn variants of well-known brands such as Silk Cut, Freda mused. He sounded a strong note of caution on the introduction of plain packaging. While it will certainly radically affect any brand’s ability to create an identity, he was not certain that it would actually reduce smoking among the Irish population. Feeding Ireland’s Future The optimism in the Leader’s Conference was tempered throughout by the awareness that we are only on the leading edge of a possible recovery. Youth unemployment levels in Europe, and Ireland in particular, are extremely high. Jill Ross, Unilever Ire-

David Keeling, Managing Director, Keelings Retail, stressed the importance of sustainability.

land Managing Director, spoke enthusiastically about the ‘Feeding Ireland’s Future’ project. Focusing on youth employment, the project emulates a similar successful scheme already underway in the UK. With one in four young people in Europe and one in three in Ireland unemployed, we are in danger of ending up with a generation that has never engaged with the workforce.

A Note of Caution Edel Russell, Consumer and IT Director at Musgrave Retail Partners Ireland (MRPI), sounded a note of caution about economic recovery for Ireland’s beleaguered grocery sector. Since 1876, Musgrave has been learning about the Irish market and its customers. The Irish grocery sector has been hit hard by the recession and another tough budget this year will impact on the Irish consumer, who is continuing to find ways to save. According to Russell, it is possible that grocery will be one of the last areas where a recovery will fully take hold. Holidays, meals out and cinema trips might be the first treats to return because the Irish consumer has found out how to shop well with the best possible value. Own brands, discounters and substitution are

Pictured are Niall Cogan, Sales Director; Gillian Hobson, Northern Ireland Unit Director; and Keith O’Toole, National Account Controller, all from Cuisine de France.

Brian Donaldson, Chief Operating Officer, The Maxol Group, addresses delegates.

here to stay for the long haul, she noted. With the acquisition of Superquinn, MRPI has become Ireland’s leading supermarket chain. The Centra brand is performing well and in particular its own brand offering is leading sales. SuperValu too is enjoying a strong performance and it is encouraging to see an indigenous supermarket chain doing so well in the face of stiff competition and a market that has changed dramatically in the last decade. As well as the further expansion of own brands, one of the most exciting new developments that MRPI will undergo in the near future will be the expansion of its omni-channel presence and likely significant developments in the digital market, to bring Ireland more closely into line with other EU economies and the US. Other speakers at the event included Ken Hughes, Consumer & Shopper Behaviouralist, CEO, Glacier Consulting; Paul Taylor, Head of International Business Development, Symphony EYC; and Declan Carolan, General Manager, ECR Ireland. Overall, the 2013 ECR Ireland Conference celebrated the fact that Irish companies have survived the situation to date and were cautiously optimistic that we may be on the edge of a recovery in the economy and in consumer confidence.

Rn oct pp 44 47  
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