Retail in Ireland Supermarket Task: SuperValu

3127 words (13 pages) Essay in Retail

08/02/20 Retail Reference this

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Table of Contents

Contents

Background to SuperValu:

Competitive advantage of SuperValu:

Use of Advertising/Marketing:

Measurable Financial Data:

Growth Potential:

Future of Retailing:

References:

For our Learning to Learn module, we were assigned the task of researching a supermarket in Ireland. Our group was given ‘SuperValu’ to research, and in this essay, we will discuss our findings under the relevant headings. The headings we will discuss in relation to SuperValu are the following, Background of SuperValu, Company’s Competitive Advantage, Use of Advertising/Marketing, Measurable Financial Data, Growth Potential, and Future of Retailing.

Background to SuperValu:

SuperValu is part of the largest grocery and food distributor, the Musgrave Group. SuperValu was founded in 1979. SuperValu has served Irish people for over 30 years and has become a well-established landmark across Ireland.
This reputation has been succeeded through their fresh food quality, strong value offering, consistent support of local producers and expert customer service across all stores. SuperValu has 223 stores across Ireland. (SuperValu 2018)

All SuperValu stores are owned by individual retailers who operate their businesses under the SuperValu brand. The brand is owned by the Musgrave Group, a Cork based food wholesale company, which is the largest private company in Ireland by turnover.  All SuperValu stores across Ireland, sell the same own branded products and use the same layout for their stores, which they obtain from the Musgrave Group. SuperValu stores are not run on a franchise basis as no fee is paid to Musgraves, but all stores buy their products directly from Musgraves.  Due to the stores being on a larger scale in relation to layout and the buying power of the group, this allows SuperValu to continue to compete with supermarkets such as Dunnes Stores and Tesco. (Kavanagh Group 2018)

Superquinn is the parent store of SuperValu, which was bought by Musgraves in 2011. In 2013, it was decided that all Superquinn stores would be re-branded and from there operate under SuperValu. Their products consist of the SuperValu brand, Daily Basics and SuperValu Signature Taste.
As a result, SuperValu has quickly become the largest supermarket chain in Ireland.

 

Competitive advantage of SuperValu:

Competitive advantage is a condition or circumstance that puts a business in a favourable business position from other businesses. This is a big part of surviving in business as it will bring customers into your business for the advantage that you have thus you will result in making money. SuperValu have many competitive advantages. They have this system of rewards where you collect points when you shop in their store. This is how it works for every €1 you spend you earn one point when you swipe your ‘Real Rewards Card’ at the checkout. These points will add up to give you real money of your shopping in the future. (SuperValu, 2018) This is a great advantage because every customer likes to get a bit of discount on their shopping, which will make them want to shop in SuperValu more often to collect more points for money off. They also have over two hundred partners that are top online brands that can also help you grow your points quicker via eshop. Examples are Debenhams, River Island, Life Style Sports and Expedia. Also, every time you use your Bank of Ireland personal credit card you earn more points. This will be very appealing to customers as a lot of people use credit cards these days. SuperValu have also partnered up with businesses such as Eir for your broadband and landline, Aer Lingus and Electric Ireland that you can use your SuperValu points to reduce your costs with these businesses. SuperValu also reward their customers with breaks away to hotels in Ireland at a cheaper rate, while they pay the rest through your earned points. (SuperValu, 2018) 

SuperValu also have cooking ambassadors which are behind SuperValu’s recipes. There are some familiar faces that we all know and then some cooking stars in the making, to name a few Kevin Dundon, The Happy Pear, Niall Breslin also known as ‘Bressie’ and David Gillik. (SuperValu, 2018) This would be a great asset as people usually take the opinions of these cooks as they admire them so they will buy or do on whatever these ambassadors say or do. So therefore, if the ambassadors are using SuperValu products or products exclusive to their store, followers of the cooks will most likely go to SuperValu to get these products also.

Another advantage that SuperValu have is that they are GAA All Ireland Championship sponsors from 1999. They are official ticket agents, so this means that you can buy your GAA tickets from them by visiting their store.(SuperValu, 2018) We all know how hard it is to get All Ireland tickets as everyone looks for them so this will draw people into their store asking about tickets and no doubt while they are in the shop looking for tickets, they will more than likely buy something too. All these competitive advantages will really be a great asset to SuperValu’s business and help them make more of a surplus.

 

Use of Advertising/Marketing:

Marketing is the management process through which goods and services move from concept to the customer. Market research and advertising are two important aspects of Marketing which are needed for a business to succeed. Marketing consists of the ‘4 P’s of Marketing’, which are Product, Price, Place and Promotion.

The first piece of the marketing mix is Product. The product of a business is the goods and/or services offered by the business to its customers. Product includes the variety of what is being sold, the quality of the goods or services, design, features, brand name, packaging and services. Regarding SuperValu, they sell a very wide variety of products, ranging from alcohol, to baby food, to everyday groceries. If you need to buy something there is a very high chance that SuperValu has it. SuperValu also has ranging quality in their stores, from cheaper self-branded cereal to higher quality brands like Kellogg’s cereal. SuperValu discovered in a survey that people prefer buying products that originated in Ireland, so the company use products that are predominately from Irish producers, which supports the producers and shows that they listen to the customer.

The second piece of the marketing mix is Price. Price is the value that is put to a product or service and includes discounts and allowances. As already stated, SuperValu has a wide variety of products on sale and with that comes a range of prices. Cheaper products are available to purchase but higher quality, more expensive products are also available. SuperValu also offer discounts throughout the year, as well as a loyalty card. Discounts keep the customer coming back to shop at their stores and the loyalty card entices customers to do the bulk of their shopping at SuperValu too. The loyalty card can be used to get special discounts off certain items, for example: It can be used to get cheaper turkeys at Christmas time. A customer will be more inclined to buy their turkey at SuperValu which will lead them into buying more supplies for Christmas due to them not wanting to go from shop to shop. If it’s available in the shop they are currently in, they will more than likely buy it there.

Place is the third piece of the marketing mix and relates to the process of moving the products from the producer to the customer. SuperValu, in Buncrana for example is located on the main road, which is in an optimal location for heavy consumer footfall, and it also has 250 free parking spaces available. It is located near two secondary schools and contains a cafe on the premises too. On top of its geographical location. SuperValu also uses Place inside the shop, by putting essentials like milk and butter near the back of the shop, they make sure customers walk past many other products which will entice them. Drinks and sweets are also located at the checkout so parents who have children with them will be coaxed into buying more.

The final piece of the marketing mix is Promotion, which are the activities which communicate the products and persuade customers to purchase the product. SuperValu partakes in many local and national activities which help them to take in more customers due to how widespread and trusted they are. SuperValu sponsors the GAA All Ireland Senior Football Championship and the annual Tidy Towns competition. In doing so they make their name more trusted throughout the country, which causes customers to feel safer to buy from their shops more, especially if they travel. SuperValu also use social media, newspapers and signs to advertise their shops, using the red colouring to draw in the focus of anyone passing by.

Measurable Financial Data:

In the year ending December 2017, the Musgrave Group had a total sale of €3.7 billion. In retail sales, they had a total of €5.1 billion, with SuperValu being the clear leader of sales of €2.9 billion. (Musgrave 2018)

The total group turnover is as follows:

Group Turnover € billions:     Profit before tax € millions:     Net Cash € millions:

2016:

€3.7

2016:

€73

   2016:

   €121.3

2017:

€3.7

2017:

€80

   2017:

   €70.8

Grant Thornton carried out a food price survey in the past 12 months and discovered that from a basket of 62 own brand items that Aldi was the cheapest store compared to Lidl, Dunnes Stores, Tesco and SuperValu. Overall, it was discovered that Aldi was 47% cheaper than SuperValu. However, from a supermarket comparison survey carried out in March 2018, I discovered that Supervalu is in third position with a market share of 22.0% in relation to supermarket popularity. Thus, even though Supervalu is seen to be more expensive, it is still ranked quite highly by their customers. This is due to their fresh quality of goods and their expert customer service skills. SuperValu is a good example of how customers will choose quality over price. (Newstalk 2018)

Growth Potential:

SuperValu has pipped Dunnes Stores and Tesco for the top spot as Ireland’s biggest grocery, with growth in its sales around Dublin helping to boost its performance. The latest data from research group Kantar Worldpanel shows that Musgrave-controlled SuperValu had a 22.3 percent share of Ireland’s multi-billion-euro grocery market in the 12 weeks to April 22, which included the all-important Easter season. Its sales in Dublin rose 4.5 percent in the period. (Independent.ie, 2018) Douglas Faughnan, consumer insight director at Kantar Worldpanel, commented on the results, noting: “SuperValu has attracted more shoppers through its doors and persuaded its customers to buy more items per trip.” (Phelan, 2018) SuperValu also plans to invest over €700,000 to promote its official retail partnership with Guaranteed Irish to highlight and raise awareness of the benefits of purchasing Guaranteed Irish brands. 75% of products stocked on SuperValu shelves are sourced in Ireland. (Anon, 2018) The food retailer has invested substantially in value, investing €15 million in money-off vouchers for its Real Rewards loyalty programme members from January to Easter, along with an upweighted promotional schedule with a new SuperValu Seven Fruit & Veg offer giving big savings on seven types of fruit and vegetables, along with promotions on healthy ranges, meat and fish and ambient product every week.

SuperValu are constantly reviewing their product range, putting new product range from Irish producers on their shop floor. They are also trying to develop their stores to ensure their customers receive the ‘wow’ factor when they enter their shop. They have fuelled many new initiatives including the expansion of their own brand products that have become very popular. They will continue to build their brand while still working alongside local suppliers.

SuperValu have announced also that they plan to open three new stores and create two-hundred and ten jobs in 2018 and fifty revamps will take place across the country as part of the €40 million investment in stores. This announcement was made at the national conference where the company revealed they had recorded sales of €2.7 billion, which was a new sales milestone for the brand. SuperValu also plans to continue to invest with its online shopping.  Since the successful relaunch of the loyalty scheme ‘Real Rewards’, an additional 160,000 customers have joined the programme, bringing the total membership to 1.1 million people.  One of the main milestones this year will be to become the first retailer to rollout autism friendly stores across its network. The initiative will see a commitment to making Autism Friendly shopping times available in more stores, with additional supports such as de-sensitisation of store sounds and autism friendly trolleys which were developed by a SuperValu employee. (SuperValu, 2018)

 

Future of Retailing:

The Future of Retailing describes how we, as consumers, will be shopping in both the near and distant future. The term given to retail shops like SuperValu, who operate out of physical buildings that they either rent or own, is ‘Brick and Mortar Retail.’ Nowadays, many of these shops are being forced to close, even industry giants. Due to the steady movement of retail from physical to mobile and e-commerce, in the next decade or two the majority of shopping will be done online and will require little physical interaction with the product.

National shops like SuperValu will have to adapt to this change or they will more than likely be replaced by Amazon or another giant worldwide company. SuperValu (Musgrave) are currently preparing their stores for the future. They are renovating their stores to “deliver a shopping experience the modern consumer demands” (Lin Grosman, Forbes, Jun 20, 2017). They want the experience to be convenient, simple and enjoyable. SuperValu have both a website and an app at their disposal and have already added self-checkouts to their stores, however in checking the app on the app store we have discovered that many people are very unsatisfied with it. The app is free and allows you to do your shopping anywhere if you have access to the internet (SuperValu, 2018). The app offers a home delivery service and has a section for commonly selected items.

One large downside in the future of retailing is the loss of jobs that will occur. Even now, SuperValu’s self-checkout tills allow people to scan and pay for their own items with little to no assistance. In the future however, instead of getting rid of people entirely, SuperValu want to mix technology with a friendly human experience by tailoring each customer’s experience to their own needs. Home delivery will become a very important factor as technology progresses, and Musgrave know this. Companies like Amazon have a goal of having a thirty-minute delivery, so if SuperValu (Musgrave) adopt this, then self-checkouts won’t even be necessary as drones can be used to deliver goods. (Lin Grosman, Forbes, Jun 20, 2017)

Neither Musgrave nor SuperValu are not worried about this change in Ireland because instead of seeing the growing digitisation of the retail experience as a threat, they see it as a thrilling opportunity. They believe that the brick and mortar way of shopping will be “all about the experience, the integration of leisure, lifestyle and shopping” in the future, and they are preparing for a time when veganism is mainstream. Musgrave chief executive Chris Martin believes that in Ireland in the year 2025, rather than seeing the end of the store, bricks and mortar retail will be re-imagined as a destination and a social hub. He believes the shops will be a place where people will go not just to buy product, but also for great food and dining experiences. (Conor McMahon,The Journal, May 22nd, 2018)

To conclude this report on our assigned supermarket task ‘SuperValu’, we believe that we have successfully discussed all the relevant information under the given headings. We have also learned some interesting things about the history of SuperValu, as well as retail in Ireland and what different promoting strategies supermarkets will have to use to survive in the coming future.

References:

  • SuperValu, h. (2018). Real Rewards. [online] SuperValu. Available at: https://superValu.ie/rewards [Accessed 22 Nov. 2018].
  • Independent.ie. (2018). Dublin sales help SuperValu to top spot – Independent.ie. [online] Available at: https://www.independent.ie/business/irish/dublin-sales-help-superValu-to-top-spot-36887990.html [Accessed 22 Nov. 2018].
  • Phelan, S. (2018). SuperValu reclaims position as supermarket supremo in latest stats. [online] Agriland.ie. Available at: https://www.agriland.ie/farming-news/superValu-reclaims-position-as-supermarket-supremo-in-latest-stats/ [Accessed 22 Nov. 2018].
  • Anon, (2018). SuperValu Has Partnered With Guaranteed Irish To Promote Local Produce |. [online] Available at: https://www.checkout.ie/superValu-partnered-guaranteed-irish-promote-local-produce/63821 [Accessed 22 Nov. 2018].
  • SuperValu, h. (2018). Our Approach. [online] SuperValu. Available at: https://superValu.ie/about/our-approach [Accessed 22 Nov. 2018].
  • http://www.webtrade.ie, W. (2018). SuperValu. [online] Kavanaghgroup.ie. Available at: http://www.kavanaghgroup.ie/store-locations/superValu.99.html [Accessed 23 Nov. 2018].
  • Simon, A. (2018). The marketing mix (4Ps) – MaRS. [online] MaRS. Available at: https://www.marsdd.com/news-and-insights/the-marketing-mix-4ps/ [Accessed 23 Nov. 2018].
  • Grosman, L. (2018). The Future Of Retail: How We’ll Be Shopping In 10 Years. [online] Forbes. Available at: https://www.forbes.com/sites/forbescommunicationscouncil/2017/06/20/the-future-of-retail-how-well-be-shopping-in-10-years/#6537c1a858a6 [Accessed 23 Nov. 2018].
  • Staff, S. (2018). SuperValu’s owner is planning for a future rife with veganism and in-store ‘experiences’. [online] TheJournal.ie. Available at: https://www.thejournal.ie/musgrave-2017-annual-report-2-4032353-May2018/ [Accessed 23 Nov. 2018].
  • Newstalk.com. (2018). GDPR Consent. [online] Available at: https://www.newstalk.com/Price-survey-reveals-Irelands-best-value-supermarket [Accessed 23 Nov. 2018].
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