Musgrave: Growing Good Business in Ireland’s Retail History

Musgrave have 10 food brands across the island of Ireland and Spain, leading the way in both retail and wholesale markets. Six of those brands are consistent market leaders – SuperValu, Centra, Daybreak, Musgrave MarketPlace, Frank and Honest coffee and La Rousse Foods. Musgrave recently reported a third consecutive year of profit growth, with profit before tax of €80 million, a 9% increase on the previous year. Sales also performed well despite ongoing food deflation, coming in at €3.7 billion.

We at CEO Today spoke with Chris Martin about notable changes in the retail industry, his leadership, and Musgrave’s heritage as it celebrated its 140th anniversary in 2016.

 

How have you influenced Musgrave since becoming CEO in 2005?

Musgrave has been in business for over 140 years and has set its sights on being relevant in another 140. With this heritage comes the responsibility to ensure the business is fit for the future. Musgrave is a family business and this ownership structure allows me and the executive team to plan for long-term sustainable growth.

My primary focus on joining the business was to invest in our brands. If you look at two of our main retail brands in Ireland – SuperValu and Centra – both have seen solid growth over the course of the past 13 years. SuperValu grew sales to €2.7 billion in 2017 and Centra has grown to sales of almost €1.6 billion over the same period.

More recently, we have focused on building a more diverse Musgrave through our ‘Growing Good Business’ strategy. We are focused on growing our core business – where we want to be the undisputed number one in grocery retailing and wholesaling – and we are extending into new ventures.

The engine of Musgrave is our retail business, and food is undoubtedly our core – but, in the past, we’ve had a hotel, a sweet factory, a laundry and a coal business. We can create value through disruption, because entrepreneurship runs through our veins. Right now, we are transforming the food business in Ireland with exciting, innovative, market-leading brands that deliver the same outstanding experience online, on the go and instore. For example, our coffee brand Frank and Honest, from a standing start some 17 months ago, is now the largest coffee brand in Ireland.

We have achieved this growth and established a vision for the future while managing the business through a period of tumultuous change. While change has always been a major factor in the retail sector, we have witnessed a series of significant disruptions during my tenure, including the worst recession Ireland has experienced in decades, the growth of the discounters and the impact of online shopping. We successfully navigated the business through this period of change by being clear about our purpose and keeping ahead of our customers, with the result that we have been able to achieve sustainable, profitable returns.

 

What motivates you to achieve the best every day? How do you inspire those around you to do the same?

Our purpose – ‘Growing Good Business’ – which focuses on creating a sustainable, profitable business that benefits our shareholders, our colleagues, partners, local communities and the wider Irish economy is highly motivating and something inspirational that encourages all of our team to do our best.

Working for Musgrave gives our colleagues the opportunity to help communities thrive and transform food retail.

One of the reasons we’ve been one of Ireland’s most successful companies for more than 140 years is because we work with colleagues and partners who share our values of long-term stable relationships, not being greedy, working hard, honesty, and achievement. These values are what sets us apart from other companies – a focus on practising good, fair and honest business, a commitment to profit with purpose and working relentlessly to innovate and lead the way in our market.

We operate in relentlessly competitive markets and recognise that getting the right people gives us an edge. This is why we invest heavily in our colleagues; not only are colleagues motivated by our purpose, but also by the knowledge that we are committed to ensuring that they can develop at Musgrave and are empowered to have an entrepreneurial mindset.

This helps us develop the best and the brightest across a broad range of sectors from marketing, commercial and finance, to trading, store design and HR, from digital innovation and big data, to IoT and logistics.

Companies that operate with a clear and driving sense of purpose are more focused and successful than those that have profit as their sole measure of success.
This is why we’ve set our purpose as ‘Growing Good Business’ – focusing on sustainable growth, but not at any price.

What makes Musgrave stand out from the crowd?

Musgrave by its very nature is unique. What makes us different is our extraordinary network of independent retail partners – thousands of family businesses based in the heart of towns and cities across Ireland, Northern Ireland and Spain. Our approach enables independent, local community retailers to go head-to-head with retail chains in a highly competitive market. We provide them with the brands, technology, supply chain and sales expertise to deliver a tailored experience for their local community which simply can’t be matched.

We are very proud of our relationship with our retailers – relationships that in many cases go back several decades. Into the future, our brands will continue to be brought to life through the expertise and local knowledge of our retail partners, who are the people who bring the human and digital food experiences together. Our brands are successful because they meet the changing needs of today’s shoppers and are developed in collaboration with outstanding retail partners who operate in the communities they live in. This gives us a huge advantage over our competitors because food leadership requires outstanding local entrepreneurs who really understand the individuals and communities they serve.

As a family business, we also benefit from being able to take a long-term outlook and focus on long-term sustainable growth for the benefit of our retail partners, colleagues, suppliers and the company. Our ‘Growing Good Business’ strategy plays a central role, placing growth at the heart of what we do, but not at any price. It has to benefit not just Musgrave, but the ecosystem that supports our business.

We believe that companies that operate with a clear and driving sense of purpose are more focused and successful than those that have profit as their sole measure of success. This is why we’ve set our purpose as ‘Growing Good Business’ – focusing on sustainable growth, but not at any price.

It’s central to the way we work that our business benefits not just the business itself, but everyone it touches – shoppers, suppliers, retailers and communities, shareholders and our colleagues. We also leverage our scale and reach to support local communities and benefit the Irish economy. This is what we mean when we talk about profit with purpose.

 

What would you say are the key pillars behind Musgrave’s ongoing growth and success?

At the heart of our growth and success are our brands. Underpinning our strategy is a focus on four key areas, which we call ‘Famous Fours’, while at the same time exploring growth opportunities in new markets. Underpinning our strategy is a focus on four key areas, which we call our ‘Famous Fours’:

1. Food leadership

We make it our mission to be known for great quality, healthy and inspiring food.

2. Building better brands

Our goal is to build profitable, omnichannel brands that are different and better. We get ahead of the consumer and deliver better than anyone else.

3. Partnership

We attract the right partners and build long-term business relationships. We work with ambitious, entrepreneurial partners who share our values and commitment to profit with principle.

4. People

We ensure that Musgrave is the destination place to work, where talented people can grow and thrive.

 

 

What has been your proudest achievement at Musgrave?

My proudest achievement has been the recognition of our brands at home and internationally for food leadership, innovation and sustainability. These accolades include receiving the Top Family Business Award at the seventh European Families in Business Awards; becoming the first retailer to achieve Bord Bia Origin Green accreditation; the selection of Centra Parnell Street as Innovative Store of the Year at the international IGD Awards; seeing the SuperValu Food Academy programme honoured with a Ruban d’Honneur award for Innovation at the European Business Awards; and sweeping the boards at the Checkout ‘Best in Fresh’ Awards, including the prestigious ‘Best Group Retailer’ award. This external recognition reflects how Musgrave is developing a different and better offer to meet consumers’ needs.

 

Have there been any substantial changes you’ve noticed in the industry since joining the group or in the last few years? How have these affected you and your work?

I have witnessed some of the most substantial changes to the retail sector, including the introduction of hypermarkets in the UK, the growth of fast food, the disruption of the discounters across fashion and food to the move toward omnichannel retailing. Retail is now making another step change – most notably due to the rise of the millennials, the huge shift to online, the continuous demands for value, the changing competition and a more health and environmentally-conscious consumer.

We are still in the midst of massive change with a dramatic shift in people’s attitudes to food. Consumers are now making much more informed decisions about the health and nutritional benefits of what they buy, coupled with growing concern for the environment and the sustainability of the food ecosystem.

Shoppers are also demanding a new level of convenience, speed and availability. The grocery retail experience is also evolving – rather than seeing the demise of the traditional store, these outlets will be re-imagined as multi-purpose destinations; the places where people will go not just to buy products, but also for great food and dining experiences.

The constant throughout this change is that the winners have always been the brands that have been clear about their purpose, kept ahead of their customers and that could quickly adapt to the changing world. This is the simple philosophy that drives Musgrave’s brands – brands that understand their customers, continuously innovate and do the ordinary extraordinarily well. Such an approach has meant that our brands – SuperValu, Centra, Daybreak and MarketPlace – are leaders in each of their markets here in Ireland.

 

How did Musgrave celebrate its 140th anniversary in 2016? What milestones has it reached since then?

We’re incredibly proud of our heritage and celebrated our 140th year in business by reflecting on how far we, and the world we live in, has come since Musgrave was founded in 1876.

To celebrate, we invited colleagues past and present to share their special memories of working with Musgrave, creating a memory book of people’s special experiences of our company history. We also set out on a quest to celebrate our colleagues and launched a new annual awards ceremony to honour colleagues who inspire and show true passion and dedication in bringing to life our values.

Our ‘Growing Good Business’ strategy to set up Musgrave for its next period of growth was launched around our 140th anniversary and we have marked a number of significant developments since then including:

• The acquisitions of LaRousse Foods and Donnybrook Fair;
• New partnerships for export opportunities in China and the Middle East;
• Growing our coffee brand Frank and Honest from a standing start to become the largest coffee brand in Ireland.

 

What is the current state of the economy in Ireland? Does Musgrave have an effect on this and vice versa?

The Irish economy has undergone a remarkable turnaround, having been in the depths of recession a few years ago to now being one of the fastest growing economies in Europe. At the height of the recession, the unemployment rate stood at approximately 16%, but now Ireland is set to hit full employment next year, with the rate hovering slightly above 5%. Similarly, there has been a turnaround in consumer spending, which is set to hit the €100 billion mark for the first time this year.

While there are a lot of positives, it should also be noted that the Irish economy faces a number of external risks and challenges. These include questions about the global taxation environment and uncertainty about future trading conditions with the UK due to ongoing Brexit negotiations.

Musgrave is the largest private-sector employer in Ireland and feeds one in three people across the island of Ireland every day, so there is a close connection between us and the economy. We have always prided ourselves on the support we and our retail partners provide to the communities we operate in. In this regard, we are proud of our Irish heritage and our long-standing commitment to supporting Irish suppliers, the Irish economy and Irish jobs.

We support over 1,800 Irish suppliers. This includes long-standing relationships with Ireland’s best-known and established suppliers, but we also have championed smaller, local suppliers, particularly food producers. As the stores of our retail brands are independently-owned and operated, our retail partners can source local products that you simply won’t find on shelves anywhere else. Through employment, support for Irish retailers, our investments and our diversified food operations, we are responsible for almost €7 billion of economic activity annually in Ireland.

 

What is your opinion on how technology is influencing the retail sector?

We see technology as fundamentally changing the relationship with the consumer. Data will become the glue that unifies the retail experience – enabling the offer to be tailored to individuals using their device. The future will be about seamless shopping where the consumer is always connected, moving between the digital and physical world.

Unlike many in the retail sector, we see the rise of online and the growing digitisation of the retail experience as a thrilling opportunity rather than a threat. We are transforming bricks and mortar retail into shopping destinations – social and community hubs where people go not just to buy products but for great food experiences, and where technology enables a more unique and convenient experience. Our advantage over competitors is that our retail partners will bring human and digital experiences together to offer something different and better. This is because our business is all about creating outstanding brands that deliver exceptional value, quality food and services to shoppers.

Our approach centres on trialling technology and service innovations with a select number of retail partners and their customers before scaling across the estate.

Understanding, analysing and using customer data in a secure and transparent way will be key to delivering that seamless experience – by understanding the needs and wants of our customers and aligning it to our supply and logistics network, we will ensure that we are always satisfying our customers, regardless of where they are, what they want and when they want it.

We are still in the midst of massive change with a dramatic shift in people’s attitudes to food. Consumers are now making much more informed decisions about the health and nutritional benefits of what they buy, coupled with growing concern for the environment and the sustainability of the food eco-system.

Have there been any exciting developments recently that you could share with us?

Global demand for Irish produce continues to grow. This demand has opened up export opportunities in the process, with our latest agreement being announced earlier this year with Alosra, Bahrain’s leading premium supermarket group. Under this agreement, Musgrave will supply a selection of products from our Own Brand ranges, as well as a number of Irish brands, to the Middle East.

We also celebrated the fifth anniversary of the SuperValu Food Academy programme this year. The programme is a unique initiative to support early-stage Irish food businesses.

Participating companies gain access to expertise in branding, market research, business development and distribution to allow them to scale up and secure listings in SuperValu stores.

Since the programme’s inception in 2013, Food Academy graduates, supported by their Local Enterprise Offices, have sold €78 million worth of produce in SuperValu stores and the 329 suppliers involved have grown to provide approximately 1,500 jobs.

This is all thanks to our independent retail model, whereby SuperValu retailers are able to provide emerging indigenous food producers with their all-important first supermarket listing and a route to market.

We also launched our new sustainability strategy ‘Taking Care Of Our World’. It works within the parameters of the UN’s sustainable development goals to set out a path to achieve our overarching ambition of becoming the most trusted and most sustainable brand in Ireland. In turn, this will make a real difference to people’s lives and will have a positive impact on our communities and on the planet.

We are working hard to offer shoppers an increasingly sustainable shop, so that if they want to walk away with less packaging or even no packaging, they can.

Part of that strategy is to reduce packaging in-store and make 100% of SuperValu’s own brand and fresh produce packaging recyclable, reusable or compostable by 2025. SuperValu’s announcement that it is the first retailer in Ireland to introduce fully compostable and biodegradable produce bags for use by customers is an important first step in that direction.

Marking another first, our SuperValu stores have also pioneered an autism-friendly initiative and this year, Clonakilty in Cork became the first autism-friendly town in Ireland, led by the local SuperValu store.

 

 

 

For Musgrave, what do you look forward to most as we move into 2019?

Our company strategy looks to 2025, where we see an evolution of the food industry due to a growing population, a shift in people’s attitudes to food and the dissolution of the boundaries between eating at home and out of home. We also see traditional stores becoming destination experiences and the emergence of omnichannel to the point where people can buy the food they want, where and when they want it – delivered to their home, eaten in-store or on the go.

In 2019, what I am most excited about is the delivery of a shopping experience that stays ahead of consumers’ expectations, allowing us to continue with the strong sales momentum we see across all of our brands. We will continue to revamp existing stores and open new ones; we have an exciting innovation agenda ahead, which is reflective of our food leadership credentials and which includes the roll-out of new offerings such as Moo’d ice cream. Finally, as we look to the next 12 months, we have ambitious plans to accelerate our digital investment programme.

With our ‘Growing Good Business’ strategy, we are really excited by what the future holds for Musgrave. There are transformative changes taking place in food retail and we see opportunities. In the future, we believe that retailers who bring human and digital food experiences together will thrive. At Musgrave, we are uniquely positioned to achieve this, which we believe gives us a huge competitive advantage.

 

Musgrave partners with over 1,400 independent retailers throughout the island of Ireland and Spain. Almost 45,000 people work directly for Musgrave or in one of the stores associated with our brands, with 35,000 of these jobs located in Ireland. This makes Musgrave Ireland’s largest private-sector employer. To put this into context, our 10 market-leading food brands feed one in three people on the island of Ireland every day.

Under Chris’ direction, the business has focused strongly on partnering with entrepreneurial retailers to grow and develop retail and wholesale brands. SuperValu, Centra, MarketPlace and Daybreak are all market-leading brands in their respective categories.

Before joining Musgrave, Chris enjoyed a lengthy career working in retail across the UK and Europe for 33 years. He served in a variety of positions, including CEO of Mothercare plc and Group Finance Director of Storehouse plc, as well as various roles in Asda and Pizza Hut.

He has also held a number of Government-appointed and board positions, including being a member of the EU High Level Group on Retail Competitiveness. He is currently a board member of Business in the Community.

 

www.musgravegroup.com