Musgrave profits jump as sales top €4.5bn

Musgrave, the Cork-headquartered retail group that owns SuperValu and Centra, increased sales last year by 1 per cent to breach the €4.5 billion barrier. The company’s pretax profits also rose by about 12 per cent to more than €110 million, according to accounts obtained by The Irish Times.

The company said its financial performance is likely to slip somewhat this year, however. Group chief executive Noel Keeley said a resurgence in Musgrave’s food-service business, which supplies hospitality outlets, would make up for only “some of the losses we are seeing on the retail side” in 2022.

Grocery revenues have been declining across the market for most of this year as the economy returns to normality following the pandemic, which led to a spike in shop sales in 2020 and 2021. Customers have also been shopping around for better value, especially in the second half of the year. Inflation in the grocery sector now stands at 13.4 per cent, the highest in decades.

By the numbers

The majority of the more than 1,250 shops in Musgrave’s network are privately owned by independent retailers, to which Musgrave acts as wholesaler. Overall, the shops in its network took in €6.3 billion at the tills last year, the company’s annual report shows. Retail sales at the SuperValu supermarket chain reached about €3.5 billion, while sales at Centra Convenience stores were €2.3 billion. More than 90 per cent of these are independent franchisees.

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Of Musgrave’s group turnover, €3.8 billion was generated by its operations in the Republic, where it also owns Daybreak as well as a chain of cash-and-carry outlets and the Donnybrook Fair upmarket retail chain that it bought in 2018 in a deal worth up to €25 million.

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It had €500 million of sales in Northern Ireland, where it also operates Mace. Musgrave’s Spanish operation in the eastern Levante region, where it has close to 90 Dialprix outlets and a cash-and-carry business, generated sales of about €200 million.

The accounts show the business paid a dividend of €18.6 million to the Musgrave family. While its sales and profits might come under greater pressure this year compared to 2021, the group’s balance sheet suggests it is well placed to handle any strain. At the end of 2021, it had cash on its balance sheet of €221 million, almost double the previous year. It also had accumulated profits of €537 million.

Mr Keeley says he expects the group to have a “reasonable 2022, providing Christmas works out okay”. He declined to make any further prediction, highlighting that it would be the first Christmas under the Government’s regime of minimum unit pricing for alcohol. Drink sales were traditionally a battleground between supermarkets at Christmas.

Musgrave says in its annual report that it spent €40 million on revamps and new store openings in 2021. It is due to open a new SuperValu outlet in Newcastle, west Dublin, shortly after Christmas.