Irish suppliers to Superquinn will face increased competition for shelf space from foreign traders in the new year. But the supermarket group says the net gains to Irish companies will more than offset any losses when it launches its new Euro Shopper range of products early next month.
Euro Shopper will replace Superquinn's own-brand Thrift range, which is to be phased out, and is being launched in conjunction with ten other supermarket chains throughout the EU.
It means continental suppliers of Euro Shopper products will gain access to Superquinn shelves at the expense of some Irish companies currently producing items for the Thrift label.
However, Superquinn's purchasing director, Mr Damien Carolan, said the development would open doors to 23,000 supermarkets EU-wide for some of the chain's Irish suppliers. More than half of Superquinn's 250 Euro Shopper products will continue to have Irish suppliers, he said, while no Irish company currently supplying the chain will be dropped.
He said 35 of the 45 Thrift suppliers were Irish and 30 of these would continue to supply Euro Shopper items. The new label would have one new Irish supplier, bringing the total to 31. Superquinn would continue to stock goods from the five Thrift suppliers who have lost out.
Superquinn's European connections were established four years ago when it joined Associated Marketing Services (AMS), a group of ten other chains in nine EU countries which co-operate in, among other things, purchasing goods and developing technology.
The group includes major chains like Edeka in Germany, which has 11,000 stores; Casino in France (2,800); ICA in Sweden (2,300); and Safeway in Britain, which has nearly 500 outlets. Superquinn, with just 16 shops, is by far the smallest member of the 23,000-strong association.
Mr Carolan said its association with other groups throughout the Continent gave Superquinn direct access to European suppliers, like wine producers who deal with Casino in France.
Superquinn in turn had introduced its AMS partners to Irish suppliers of beef, dairy, lamb, fish and other products. Developing such contacts would otherwise be expensive and time-consuming for individual retailers.
Shared technology was another area of mutual benefit. The "selfscanning" system which Superquinn has introduced in its Lucan shop, enabling customers to check how much they've spent as they move around a store, was developed by a Dutch member of AMS, the Albert Heijn chain. "We simply did what they did. We adopted it, when otherwise we would have had to spend four or five years on R&D developing it for ourselves," said Mr Carolan.
He said Superquinn had joined AMS, whose chains had a 13 per cent share of the EU grocery market, because "we felt if we weren't in the middle of things happening in Europe we would be at a big disadvantage."
Superquinn has just under 8 per cent of the Irish grocery market, which in turn comprises only 1 per cent of the EU total. "Eight per cent of 1 per cent doesn't give you a lot of clout at European level. This means we're part of a club with a large share of the EU market."
Referring to the advantages for Irish suppliers to Superquinn, he said: "If we get them to take even one product of ours, that's the equivalent of about 200 products coming into Ireland from Europe." Developing its EU contacts was also necessary for Superquinn to protect its future and that of its 3,000 employees in the face of competition from much larger multiples operating in Ireland. "Even if there is a price to pay, we must be part of a large European family."
Some Euro Shopper items - such as non-transportable or perishable goods - will continue to be produced by Irish suppliers to specifications agreed by AMS members.
