Action Men

THE so-called supermarket wars erupted again this week, but this time the issue was not price-cutting. The protagonists in this ease were the Dunnes Stores workers and the family-owned company's management.

For the secretive and combative family firm, Tuesday was a day when history was made. For the first time a member of the board was taking part in industrial relations negotiations.

Mr Andrew Street, the unknown quantity in the evolving Dunnes game-plan, has recently arrived from the highly respected British chemist chain Boots. He listened to the negotiations between union representatives and management and took an active part when he felt he had something to contribute.

Described as "polite" by those at the talks, he has been brought into Dunnes to drag the company into the era of new technology. Whatever other problems Dunnes has, there is unanimous agreement that the company must introduce scanning at checkouts and other technologies throughout its operations.

The company is the last among its competitors to grasp the technology issue, which, when used properly, can help radically reduce costs. Aside from using it at checkouts, it could greatly assist the company in stock control and ensure it does not order and store goods unnecessarily.

If you order goods today and you only need them in 10 days time instead of in a week's time, and you do that every week, it adds up over a year," says one source. Such savings are important to a company like Dunnes which earns g9od interest on its money when on deposit. The company's cashflow is estimated to be £850 million to £1 billion per year in its 73 stores nationwide.

Dunnes recognises that it needs to introduce change." says a competitor. "that is obviously one, of the reasons they hired Andrew Street.

Mr Street (44) was director of Information Systems for six years at Boots and was recognised for being at the cutting edge of technology and systems in the company. His official title at Dunnes is director with responsibility for information systems and logistics.

A chartered engineer and computer science graduate, he was born in Holyhead in Wales and worked for Boots for 12 years. Before that he worked with IBM and the Greater Manchester Transport authority.

The talks centred on issues including backdating a 3 per cent payrise agreed under the PESP, which the Labour Court said should be backdated to last September. And it is a safe bet that former Quinnsworth managing director Dick Reeves was closely monitoring the talks delicate progress.

Mr Reeves (53) was poached by Dunnes three months ago to become food director. It was a bombshell at the time, but in hindsight some industry observers say it was a logical move.

Mr Reeves, for so long a key figure at Quinnsworth, was instrumental in building the company's market share to 24-25 per cent (if the Crazy Prices chain is included).

SuperValu/L&N has about 20 per cent of the market, Superquinn has about 7 per cent, Spar and Centra almost 4 per cent each, Roches Stores (3 per cent), Mace (2 per cent) and Marks & Spencer (5 per cent).

"Dunnes made a decision to get someone with a record of achievement that they desired," says one competitor.

Although Dunnes has had a chequered history, with news about the business and the family never too far from the headlines it is a household name in Ireland and commands a lot of consumer loyalty. Its market share has slipped from 21-22 per cent and is now estimated to be around 19 per cent of the highly-competitive food industry said to be worth around £4.2 billion per year.

There are several reasons for this according to industry sources, not least the damaging strike last year from which it is still recovering. "Consumers' shopping habits change," says one source, "Dunnes handed customers to,, Quinnsworth and Superquinn on a plate.

Dunnes is admired and despised in almost equal measure. The public, trade unions, even politicians and industry experts berate the company's style of management. They point to Margaret Heffernan and Frank Dunne, the key players in the firm since Ben Dunne left with a £100 million settlement, as being "confrontational and dictatorial".

Others point to Dunnes success in expanding and maintaining a forceful presence in a cut-throat market and praise Margaret Heffernan's efforts to move the company more upmarket since her brother's departure.

It is this scenario which competitors say occupies Mr Reeves. Does he move the company upmarket? Will the family interfere? When he was appointed there was speculation that he was to be given a free hand as a condition of his appointment.

Opinion is now divided. One source says he sacrificed a lot to take on the position. Regardless of the package, why would he go to a company on a three or five-year contract only to have his plans thwarted at every turn? Another says regardless of what happens he will walk away a wealthy man.

For Mr Reeves, moving to Dunnes is a sort of homecoming. He studied law at UCD and Kings Inns and his retailing career began in Dunnes, where he worked for 14 years as a buyer before moving to Quinnsworth in 1983 as a food buyer. Dunnes may see his twin track approach there as an appealing one: between Quinnsworth and Crazy Prices, the group was able to run two brand supermarket chains under one umbrella - appealing to the middle and lower ends of the market.

Mr Reeves is also credited with introducing the premium brand labels into Quinnsworth.

In contrast some observers are highly critical of Dunnes positioning of itself as a supermarket brand. "On the one hand you have a downmarket food store, with an unappealing St Bernard own-brand label and on the other, a more upmarket clothing sector," says one source.

There is also talk of changing several of the smaller supermarkets, which are not profitable into convenience store operations. One competitor says he is somewhat puzzled by the move and he cannot see how it fits into the company's current policy.

He says it is not easy to run a 5,000-square-foot store, opening longer hours, with a sales volume which might not be very large and running it with one manager. "That's probably a job best left to the independent retailers," he says.

He says he thought Dunnes might have concentrated on tackling current pressing issues within the company. These are issues which have been around for several years and will not be resolved overnight, he says.

He lists these as introducing new technology, improving industrial relations and improving the company's image through better marketing.

Another trade source says Dunnes does not seem to know what it is doing, has no proper management structure and does not run the business in a style which befits a £1 billion company.

Although somewhat harsh, his comments are echoed by others in the business. Both Frank Dunne - who it is said has paid a key role in industrial relations - and Margaret Heffernan, are said to deeply resent being told what to do by anybody.

But their appointment of a highly-regarded industry figure such as Dick Reeves is an indication that they realise things will have to change.

Three or four years ago, Dunnes had 23-24 per cent of the retailing market in Ireland. Regaining market share will not be an easy task.

"I think Reeves may try to improve margins without necessarily improving market share," says Colette O'Connor, editor of Shelflife, a retail magazine for the trade.

Those who know him, say Mr Reeves legal training has stood him in good stead. "He doesn't go in with all guns blazing," says one source, she weighs up the options and then takes a strategic approach."

Married with three children, associates say sailing is his hobby. Acknowledged as a hard worker, he is said to be very astute, bright, tough and committed, but quite serious and not particularly personable.

Nobody doubts his ability. The only doubt people have is whether he can force through the changes he believes are necessary.

Winning over the workers is one task, winning over management is another, observers argue.

If he manages to achieve this, he will have brought Dunnes back to the central position it once held in Irish retailing.