Downturn compels Dunnes to shelve three new stores

DUNNES STORES is believed to have scaled back expansion plans in Ireland as a response to tougher trading conditions resulting from the economic downturn.

Dunnes is reported to have shelved plans to open stores in Drogheda, Co Louth; Saggart, Co Dublin, and Newtownmountkennedy in Wicklow.

It is understood that the decision was taken at a recent board meeting. The secretive retailer, headed by Margaret Heffernan, is believed to have suspended recruitment programmes for these stores. No comment was available from Dunnes Stores yesterday.

Dunnes had agreed to anchor the €60 million Mount Kennedy Town Centre in Newtownmountkennedy and was originally to have opened its store there by April this year. It is understood that a number of people who applied for jobs at the Wicklow store have been informed that the positions are no longer available.

The Greystones Chamber of Commerce yesterday issued a statement expressing its concern that Dunnes was not proceeding with the store.

"It is deeply disappointing that the numerous new jobs that were to be created in Newtownmountkennedy will no longer be delivered," said Mark Felton, president of the Greystones and District Chamber of Commerce.

Dunnes has 118 stores in the Republic, according to its website, and has been engaged in an aggressive expansion campaign in the past couple of years. Last year alone, Dunnes is estimated to have opened about 16 outlets here.

The expansion, however, has not boosted its market share noticeably. Figures from TNS Worldpanel Ireland for the 12 weeks to July 15th show Dunnes had a market share in value terms of 23.9 per cent, the same level as a year earlier.

Its market share in volume terms, however, was down 2.1 per cent. By contrast, Tesco's share of volume rose by 4.6 per cent, while discounters Lidl and Aldi recorded a 3.5 per cent increase.

One senior retail source said the market share data indicated that Dunnes was increasing its prices.

Tesco, Dunnes and Superquinn have all advertised heavily in recent months to highlight their price offers and win trade.

Clothes retailer Penneys said yesterday it has acquired the freehold interest in a site in the town centre of Naas, Co Kildare and will open a "superstore". The site is currently occupied by Superquinn and Penneys will take possession when Superquinn relocates to a new store in the nearby VEC site.