THE FRIDAY INTERVIEW:Chris Martin, chief executive of Musgrave

SITTING IN a fifth-floor office in Huguenot House beside St Stephen’s Green in Dublin, Chris Martin has removed his suit jacket and is pouring himself a glass of tap water. The heat is on in the Irish grocery sector, and it has nothing to do with the sun that’s beaming through the window on Wednesday afternoon.

Musgrave, a 134-year-old, family-owned, cash and carry grocery group based in Cork, saw group sales slip by 3 per cent last year, while profit was 7 per cent lower.

The results follow a similar trend from 2008. In Ireland, the decline in sales was more stark – down 7 per cent to €2.7 billion. The British business grew its turnover, but Spain suffered a similar fate to Ireland.

In retail, there was just one theme in 2009 – cash-strapped Irish consumers wanted lower prices. So it was all about flogging big boxes of detergent, two-for-one offers and “feed-your-family-for-a-fiver” meal deals.

We are halfway through 2010, and Martin concedes the picture is barely any brighter. “You’ve got volume growth. The fundamental issue though is that there is still significant price deflation,” he says. “Consumers are beginning to spend up a bit to treat themselves. That wouldn’t have been the case six to nine months ago. That presents opportunities, but it will never go back to the trends of the past.”

On a positive note, Martin reports that the phenomenon of people going north of the Border in droves in search of cheaper groceries has “eased”, helped by a firming of sterling and keener pricing down South.

“We’re seeing volume growth coming through in our Border retailers,” he says.

Were Irish retailers gouging consumers on price in the Celtic Tiger years? “No,” is the clear reply from Martin. “Our margin is just over 1 per cent; our retailers’ margins are in the order of 3 per cent. From our perspective, there wasn’t a rip-off going on from the retailers’ side.”

Martin claims SuperValu, Centra and Daybreak – its Irish retail brands – performed well last year, all things considered.

“Our brands performed very strongly in the context of a market that was seeing aggression, not just from the likes of Tesco, but from the discounters as well.”

Martin is also reporting improved footfall through its cash and carry outlets, the cornerstone of the Musgrave empire. Again, prices remain depressed.

This has spurred the Cork company to work the angles for growth. It recently launched an “ethnic range” of food items to the catering trade, targeted principally at the Chinese restaurant market, albeit some time after the explosion in the foreign population living here.

“That’s going very well for us,” Martin says chirpily. Sensing what the next question will be, Martin adds: “Please don’t ask me what products they are . . . I’m just not that familiar.”

Martin has a posh British accent. It belies an upbringing which saw him raised in Huddersfield – a raw, working-class city in Yorkshire.

“No, I don’t have a Yorkshire accent. I’ve travelled around a lot,” he says by way of explanation.

The story goes that Martin and his wife drove across the Pennines to make sure their son was born in Yorkshire and could play cricket for the county. Martin rocks back in his chair laughing. “It was certainly a key influence . . . cricket was in the background,” he says, before adding: “The poor lad is not a very good cricketer.”

Never mind.

Martin studied economics in Newcastle before qualifying as an accountant. “It was the early 1980s, the horrible recession of the Margaret Thatcher years, so the only job I could focus on was training to be an accountant.”

That led to a job in the finance department of Asda, a British supermarket chain that would later be acquired by US retail giant Wal-Mart. “That was a time when Asda was expanding from its Yorkshire base,” he recalls.

After eight years with Asda, he joined Pizza Hut, owned by PepsiCo, as finance director. He spent four years there and played a part in the “massive expansion” of its franchise network in the UK, a period he now looks back on as great training.

Then it was on to Storehouse, which was set up by Terence Conran. In the 1980s, it owned a big chunk of the UK high street, including BHS, Mothercare and Habitat. Martin was involved in selling BHS to billionaire Philip Green.

“I sat in a room with Philip for about four or five months.”

How was that experience? “Fair dues to the guy. He came with a reputation that he’d fallen out with the City, but he always did what he said he’d do. He bought BHS and turned it around.”

From there, Martin became chief executive of Mothercare, which had operations in 35 countries. He returned it to the black, but a disastrous investment in new warehousing resulted in Martin being shown the door. “Mothercare was tough. There’s no doubt when you’ve been in a public role and you don’t perform, you find yourself in a difficult position.”

Martin then saw an job advertisement in the Financial Times for a finance director at Musgrave. He landed the role, crossing the Irish Sea in 2003. “It was a real opportunity to do something different,” he says.

But was he also running from his difficulties at Mothercare? “There was an element of that, but that would be unfair on Musgrave. There’s a real honesty and work ethic that sits in Musgrave, and that’s what I saw as very appealing.”

This was about the time the Irish economy went into overdrive. What did Martin make of it all on arriving here?

“My impression of Ireland was one of confidence, one of prosperity. I hadn’t really comprehended how far it was going,” he reflects.

“The excess kicked in around the end of 2004. In those days, Irish businesses didn’t really have a clear focus on productivity and efficiency.”

Martin came from the back of the field win the race to become Musgrave’s chief executive in 2005, overtaking seasoned Musgrave executives Eoin McGettigan and Michael Nason along the way.

Was he surprised? “I was a bit, actually. I was very conscious that I was relatively new to the company.”

He admits to hesitating before accepting the role – the manner of his departure from Mothercare weighing on his mind. “There was a lot of soul-searching on my part on the CEO role,” he says.

But he has no regrets and insists that he does not harbour any ambition to return to a big executive role in the UK in the future.

“No, I love working for Musgrave and I think there are a lot of opportunities for us. What we’ve been doing for the past few years has been quite innovative.

“There’s an awful lot more to do and I’m having a lot of fun at the same time.”

ON THE RECORD

Name: Chris Martin.

Job: Musgrave chief executive.

Why is he in the news?Musgrave this week said its 2009 profits fell 7 per cent while sales declined by 3 per cent.

Age: 50 in July.

Family: Married with two children.

Lives: Kinsale in Cork and Marlow in London.

Hobbies: Cricket and skiing.

Something we might expect:Like most Yorkshiremen, he loves cricket.

Something that might surprise: "I don't play golf, which is always an issue when you live in Cork."