Oireachtas Joint and Select Committees
Tuesday, 5 March 2013
Select Committee on Agriculture, Food and the Marine
Retail Sector: Discussion with RGDATA and Retail Ireland
3:00 pm
Mr. John Foy:
Going back to the coalface, my aim is to look after the consumer, but we have to make sure consumers are looked after in terms of what they are looking for. Value has become a big word in the marketplace. I am part of the Musgrave wholesale group and approximately 90% of our goods are purchased from within the group. We have an allowance which permits us to purchase from local suppliers but if we were not part of the group I do not believe, as an operator in the retail industry for the last 19 years, that we would be able to compete against the global multiples such as Tesco, Lidl and Aldi, which are among the top eight retailers worldwide. Tesco will turn over more than €40 billion this year and Lidl and Aldi will turn over more than €45 billion each. That is what I am competing against as an independent retailer in Cootehill in County Cavan.
In regard to the supply chain, I am happy to be transparent about the margin I make in milk. It is not particularly significant. Sometimes I scratch my head and ask myself where the rest has gone. That question is sometimes unanswerable in the retail sector, but the group I am with is very supportive of Irish producers and has done a lot of work between the Centra, Daybreak and SuperValu brands.
There are more than 700 shopkeepers within those three groups and they are also the largest wholesale provider to other independent shopkeepers.
On the beef issue, it saddens me that I do not have confidence any more in regard to what happens to produce before it comes into my store. I believed, with all of the bureaucratic checks I do in the context of the HACCP system and traceability in my store, that I was giving my customers the best product. To be fair to Musgraves, it has not got caught up in the horsemeat issue. However, it concerns me, as president of RGDATA, that somewhere along the way there has been a failure in the system and the consumer could suffer in the longer term.
On the issue of costs, I will give an example from my store. I use more than 1,100 hours per week in my store. About four years ago I did a survey on the costs for that and found that in comparison to an identical store in the UK, it costs me €1,400 a week extra in labour costs. My son works in a UK chain at the moment and at 22 years of age he is on £6.10 per hour. If a person of 22 years was working in John Foy's shop in Cootehill, the minimum he would receive would be €9.75. If I had that €1,400 extra per week to return more value to my consumers, I would be delighted to do that. These extra labour costs are added on to the other costs involved in the day-to-day running of our businesses, such as rates. Last week I raised the issue of rates at a meeting. If, for example, businesses were thriving, rates might increase because the retailer had the ability to pay. However, the opposite should occur if a retailer is struggling and there should be some mechanism in place to help that retailer compete in the market place.
As independent retailers, we want the ability to compete so as to ensure we give the consumers what they want. I would like to see more transparency between me and my competition. The competition does not have to put its results in the marketplace, but as an independent retailer I do. More transparency in this regard would go a long way towards achieving an awareness of the difference in prices in regard to the products we sell.
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