It is difficult to think oil a sector in the Irish economy which manifests greater competition than that which exists between supermarkets. And the rivalry between the supermarkets is nowhere more intense than between Dunnes Stores and the Quinnsworth/Crazy Prices chain it is for this reason that the move by Mr Dick Reeves from managing director of Power Supermarkets (the Quinnsworth/ Crazy Prices parent company) to Director of Food at Dunnes Stores is of enormous consequence it suggests even greater competition between the two giants, fundamental change at Dunnes Stores and cause for concern by ABF, the owners of Quinnsworth/Crazy Prices.
For Dunnes Stores and its chief executive, Mrs Margaret Heffernan, the move by Mr Reeves is in a disputably a major coup. One can only wonder at the financial inducements offered to Mr Reeves, but money would not have been his only concern. It can be a hazardous business moving into the senior management of a family owned company where the family is still involved in the running of it. Mr Reeves, presumably sought and received guarantees that he would be left to run the Dunnes' food business as he thinks fit. He presumably has negotiated an arrangement which will give him voting shares and there is the possibility that he may succeed Mrs Heffernan as chief executive.
Mrs Heffernan has displayed great tenacity and drive in running the company since so unexpectedly moving into the top job four years ago. She has brought the company up market where profit margins are fatter. She has lost some market share as a consequence but of tolerable proportions. Her determination to lead from the front on Sunday trading cost the company a nationwide strike and her handling of it left much to be desired. But there is little doubt now that Sunday trading is here to stay and she will be recognised as the person who pioneered it. Convincing Mr Reeves to switch and handing him a position of pivotal importance indicates a level of strategic planning on her part that may give her rivals many sleepless nights.
Quinnsworth/Crazy Prices responded quickly yesterday with the announcement, that Mr Maurice Pratt becomes the new managing director, he has been the de facto number two for some time and the chairman, Mr Don Tidey, is fortunate to have someone of Mr Pratt's ability. The company has seen its "share of stomach" (the trade's expression for market share) rise significantly in recent years. Unlike Dunnes, it can project itself simultaneously as a purveyor of quality goods and low price the former through Quinnsworth, the latter through Crazy Prices. The company will be determined to, maintain expansion but the defection of Mr Reeves is a serious blow and at a time when the multiples are expecting more rather than less competition.
In the short term the competition is coming from convenience stores. They have performed impressively this year. They may not take the cost conscious weekly shopper away from the multiple but they do take much spur of the moment shopping where price is of less consequence and the retailer can obtain higher margins. In the longer term it seems inevitable, given the moves being made in Northern Ireland, that the British multiples and perhaps even one from the continent will enter the market. When that happens there will be competition like never before, a scenario which cannot be other than good for the customer.