Wal-Mart Looks to Expand to Ireland

Supermarkets face competition from retail giant Asda [Sunday Business Post]

The Irish supermarket sector is set for a shake-up, with retail giant Asda considering entry to the market in the Republic and a large British wholesaler starting operations in Ireland.

The news comes as a price war looms, with SuperValu and Dunnes set to follow Tesco by announcing price cuts.

Informed retail sources said that senior executives from Asda, the second-largest retail chain in Britain, have visited sites in Donegal and other border counties in recent weeks. Asda entered the market in the North two years ago, and is now considering a move into the Republic.

Nisa-Today, a €1.3 billion British wholesaler, also plans to enter the Irish market. The company is in discussions with a number of Irish retailers and has initiated trials with a number of stores.

Nisa-Today supplies 5,000 stores in Britain and has annual buying power of almost €8 billion. The company intends to supply all types of Irish retail businesses.

A number of existing supermarket operators are cutting prices, raising the prospect of a supermarket price war. SuperValu plans to cut the prices of up to 2,000 goods by between 20 and 40 per cent over the coming year, while Dunnes Stores also intends to drop prices on a range of household goods.

The two retailers also plan to pass on savings made as a result of the strength of the euro against sterling.

Last Friday, Tesco Ireland announced that it was cutting prices on 3,000 grocery products as part of a €100 million assault on the Irish market. The retailer also said it was introducing a discount range and opening 16 stores this year.

Edel Clancy, director of communications at the Musgrave Group which owns the SuperValu franchise, said they would reduce the prices of 1,500 of its own-brand goods by 20 per cent over the coming year.

The group also intends to reduce its ‘‘nice price’’ range by 40 per cent. This range covers 200 everyday items, said Clancy.

She said that SuperValu, which has a 20 per cent share of the Irish grocery market, would also be passing on savings made on goods imported from Britain as a result of the exchange rate. ‘‘This would involve goods like Cadbury and Kellogg’s,” Clancy said.

Posted by Stephanie Lee on Tuesday, July 29, 2008