Grocers in Northern Ireland are prepared for the Wal-Mart backed new arrival, says Ronan Hegarty
Asda’s arrival on the Northern Irish grocery scene is the most significant retailing development in the province since the UK supermarkets first made the move across the Irish Sea in 1996.
On October 10 the first three conversions of the 12 former Safeway stores open their doors in Bangor, Coleraine and Cookstown, with the remaining nine following by Christmas.
John Deasy, Asda NI director, is in no doubt about the market’s potential. “Entering this market represents a very exciting stage in Asda’s development and we are looking forward to becoming a valuable part of the local community.”
However, the move has been anticipated for over a year, giving rivals plenty of time to ready themselves for the competition.
And Northern Ireland’s independent and symbol grocers say that they are not worried about the arrival of another, even one backed by Wal-Mart.
Tom Uprichard, delivered business director of J&J Haslett, operator of the Mace symbol in Northern Ireland, says: “The UK multiples have been here for 10 years now and we have already adopted a successful strategy to co-exist.”
Mark McCammond, retail operations director with Henderson Retail, which operates the Henderson group company-owned Spar and Vivo stores, also believes that the threat from Asda has been overplayed.
He says: “Independents in Northern Ireland have seen more change in the past 10 years than in the previous 30. They are resilient, professional and have responded by investing heavily in their businesses by providing superb facilities and standards of service. Independent operators are fully integrated into their local communities and their customers acknowledge and appreciate a real commitment to local sourcing.”
As for the multiples, they too claim that Asda poses little threat.
Tesco remains the clear market leader with 33 stores. Asda is going to find it hard to catch up given the planning row over out-of-town developments - politicians and planners want regulations tightened.
So far, Tesco does not appear particularly concerned by Asda’s move. A spokesman for Tesco in Northern Ireland says: “Tesco has been competing very successfully with Asda in Great Britain for many years. We see no reason for things to be any different in Northern Ireland, especially as the number of stores where we are in direct competition is extremely small.”
It could be a different story for Sainsbury though. It began 2005 in the province under a cloud. The retailer was roundly criticised by local politicians and suppliers after cancelling contracts with Dungannon Meats and Farm Fed Chicken, resulting in job losses for both firms.
It will also be smaller than Asda, with just nine stores in its estate.
Connor McVeigh, Sainsbury regional business manager, admits: “If Asda had arrived in Northern Ireland this time last year I would have been worried.”
Availability and getting the right product range have been key concerns. But chief executive Justin King is putting Sainsbury’s house in order in the province, he says.
“There have been big improvements in replenishment and distribution. Since Lawrence Christensen joined the company there has been a much greater appetite to tackle the problem.”
Sainsbury has now resolved a distribution problem which meant it had been unable to deliver much of its fresh produce until lunchtime.
Another issue was regionality. Northern Irish shoppers are brand loyal and committed to supporting local producers. This regionality is something McVeigh confesses Sainsbury has not been great at delivering. And it didn’t help that it was trying to control its entire estate from Holborn.
Now that a regional buying unit for Northern Ireland has been launched, he believes the situation will improve.
James Laws, who will be heading up the unit, claims that the timing of its creation is coincidental with the arrival of Asda, a retailer that has always prided itself on its local sourcing initiatives. It has been universally welcomed by suppliers.
Ultimately, it is likely to be the suppliers rather than the retailers that feel the biggest impact from Asda’s entry. Chief executive Andy Bond has made it clear that he will do whatever it takes to retain Asda’s position as the UK’s lowest-priced supermarket.
Haslett’s Uprichard says: “It remains to be seen if local suppliers are allowed to do business profitably with Asda. The retailer certainly has the capability to further undermine the supplier infrastructure here.”
One senior manager from a major supplier in the province believes that the smaller players could be particularly hard hit. He said: “We have an advantage in that we have already worked with Asda and have a good relationship with them. I am not sure how the smaller manufacturers and suppliers will fare.”
Asda recently held a conference in Belfast in order to promote its local sourcing credentials and reassure suppliers, while Sainsbury’s McVeigh argues there is no benefit to anyone in devaluing strong brands.
Tesco is equally keen to emphasise strong relationships with local suppliers. Its spokesman says: “We currently purchase well over a quarter of a billion pounds worth of goods from Northern Ireland each year. We are always actively looking for ways to increase this figure.”
Henderson’s McCammond is sceptical. “What the multiples say compared with what they do is not always the same thing. Some of their initiatives appear to be rather superficial.”
In order to get through such a crucial trading period as Christmas, Asda will have to iron out any creases in its systems very quickly. Having taken on Wincanton, the Larne-based company that handled distribution for Safeway, to look after its supply chain, Deasy is confident that between them they can get it right.
He says: “Wincanton’s Larne site is already geared up for an arrival and our logistics team have plans in place that, if anything, will improve the level of availability in these NI stores.
“Thriving and growing with strong competitors around is nothing new for us. We’re strong because we know how to compete in tough times.”
Asda’s arrival on the Northern Irish grocery scene is the most significant retailing development in the province since the UK supermarkets first made the move across the Irish Sea in 1996.
On October 10 the first three conversions of the 12 former Safeway stores open their doors in Bangor, Coleraine and Cookstown, with the remaining nine following by Christmas.
John Deasy, Asda NI director, is in no doubt about the market’s potential. “Entering this market represents a very exciting stage in Asda’s development and we are looking forward to becoming a valuable part of the local community.”
However, the move has been anticipated for over a year, giving rivals plenty of time to ready themselves for the competition.
And Northern Ireland’s independent and symbol grocers say that they are not worried about the arrival of another, even one backed by Wal-Mart.
Tom Uprichard, delivered business director of J&J Haslett, operator of the Mace symbol in Northern Ireland, says: “The UK multiples have been here for 10 years now and we have already adopted a successful strategy to co-exist.”
Mark McCammond, retail operations director with Henderson Retail, which operates the Henderson group company-owned Spar and Vivo stores, also believes that the threat from Asda has been overplayed.
He says: “Independents in Northern Ireland have seen more change in the past 10 years than in the previous 30. They are resilient, professional and have responded by investing heavily in their businesses by providing superb facilities and standards of service. Independent operators are fully integrated into their local communities and their customers acknowledge and appreciate a real commitment to local sourcing.”
As for the multiples, they too claim that Asda poses little threat.
Tesco remains the clear market leader with 33 stores. Asda is going to find it hard to catch up given the planning row over out-of-town developments - politicians and planners want regulations tightened.
So far, Tesco does not appear particularly concerned by Asda’s move. A spokesman for Tesco in Northern Ireland says: “Tesco has been competing very successfully with Asda in Great Britain for many years. We see no reason for things to be any different in Northern Ireland, especially as the number of stores where we are in direct competition is extremely small.”
It could be a different story for Sainsbury though. It began 2005 in the province under a cloud. The retailer was roundly criticised by local politicians and suppliers after cancelling contracts with Dungannon Meats and Farm Fed Chicken, resulting in job losses for both firms.
It will also be smaller than Asda, with just nine stores in its estate.
Connor McVeigh, Sainsbury regional business manager, admits: “If Asda had arrived in Northern Ireland this time last year I would have been worried.”
Availability and getting the right product range have been key concerns. But chief executive Justin King is putting Sainsbury’s house in order in the province, he says.
“There have been big improvements in replenishment and distribution. Since Lawrence Christensen joined the company there has been a much greater appetite to tackle the problem.”
Sainsbury has now resolved a distribution problem which meant it had been unable to deliver much of its fresh produce until lunchtime.
Another issue was regionality. Northern Irish shoppers are brand loyal and committed to supporting local producers. This regionality is something McVeigh confesses Sainsbury has not been great at delivering. And it didn’t help that it was trying to control its entire estate from Holborn.
Now that a regional buying unit for Northern Ireland has been launched, he believes the situation will improve.
James Laws, who will be heading up the unit, claims that the timing of its creation is coincidental with the arrival of Asda, a retailer that has always prided itself on its local sourcing initiatives. It has been universally welcomed by suppliers.
Ultimately, it is likely to be the suppliers rather than the retailers that feel the biggest impact from Asda’s entry. Chief executive Andy Bond has made it clear that he will do whatever it takes to retain Asda’s position as the UK’s lowest-priced supermarket.
Haslett’s Uprichard says: “It remains to be seen if local suppliers are allowed to do business profitably with Asda. The retailer certainly has the capability to further undermine the supplier infrastructure here.”
One senior manager from a major supplier in the province believes that the smaller players could be particularly hard hit. He said: “We have an advantage in that we have already worked with Asda and have a good relationship with them. I am not sure how the smaller manufacturers and suppliers will fare.”
Asda recently held a conference in Belfast in order to promote its local sourcing credentials and reassure suppliers, while Sainsbury’s McVeigh argues there is no benefit to anyone in devaluing strong brands.
Tesco is equally keen to emphasise strong relationships with local suppliers. Its spokesman says: “We currently purchase well over a quarter of a billion pounds worth of goods from Northern Ireland each year. We are always actively looking for ways to increase this figure.”
Henderson’s McCammond is sceptical. “What the multiples say compared with what they do is not always the same thing. Some of their initiatives appear to be rather superficial.”
In order to get through such a crucial trading period as Christmas, Asda will have to iron out any creases in its systems very quickly. Having taken on Wincanton, the Larne-based company that handled distribution for Safeway, to look after its supply chain, Deasy is confident that between them they can get it right.
He says: “Wincanton’s Larne site is already geared up for an arrival and our logistics team have plans in place that, if anything, will improve the level of availability in these NI stores.
“Thriving and growing with strong competitors around is nothing new for us. We’re strong because we know how to compete in tough times.”
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