Competition hots up with arrival of cut-price supermarket

Competition in the retail food sector in Dublin city centre will be intensified further when another giant German discount trader, Lidl, opens an anchor store in the proposed Moore Street shopping mall. Lidl executives have agreed terms to trade out of a 14,000 sq ft store a few hundred yards from where Aldi opened a smaller supermarket on Parnell Street late last year.

The joint promoters, Shelbourne Developments and the Scottish-based Morrison Developments, have already begun site work on the 230,000 sq ft retail and hotel complex which will have an end value of around £60 million when completed in 2002. Lidl's arrival in Dublin was not unexpected as it had been looking for a suitable location for some time. It already trades out of seven provincial stores in Mullingar, Portlaoise, Cavan, Limerick, Ballinasloe, Letterkenny and Athlone. Lidl is believed to be interested in opening up several more stores in Dublin city centre.

Aldi has been trading exceptionally well since opening beside the Ilac Centre. Both Aldi and Lidl are determined to gain a strong foothold at the bottom end of the food market through heavy discounting on a limited range of own-brand labels. The Germans apparently operate on a margin of 3 to 4 per cent as against margins of at least 11 per cent in many of the leading supermarkets.

Rents in the Moore Street Mall will be about £35 per sq ft, according to the letting agent, Cormac Kennedy of Gunne Commercial. Discussions are continuing with a number parties interested in acquiring and leasing different elements of the scheme, including the 197-bedroom hotel.

The mall will be the first of a number of redevelopment schemes due to get under way off the top end of O'Connell Street. The Moore Street Mall will link in to the proposed £100 million Carlton shopping and leisure centre to be built on the former Carlton cinema site.