Dunnes Stores is facing increased competition from British retail multiples in the Republic and not just in the cities, the company's managing director, Ms Margaret Heffernan, has warned.
Addressing staff this week, she said the family-owned retailing group intended to remain just that, but said UK multiples would fight to win market share all over Ireland. She told staff that it was not a question of if, but when Sainsburys would enter the market in the Republic.
Dunnes is competing against UK multiples in the North, where it has found its margins squeezed, especially in the food sector, and with Tesco in the Republic. Ms Heffernan told staff that the UK multiples would seek sites everywhere. This would bring an element of competition to retailing which had not hitherto existing. It is understood that Ms Hefferan also told staff that she and her brother Ben are now very good friends.
Ms Heffernan, who had a series of meetings all this week with staff from all the companies branches, from junior manager level upwards, said Dunnes intended to develop several sites itself this year. It owns almost 80 stores in the Republic. She, and other senior executives who addressed staff, said they would be focusing increasingly on improving the stores, continuing to introduce new technology, staff training, and marketing.
It is understood that staff were also told the company wants to continue to develop stores overseas and will increase its focus on its Northern Ireland operations. The meeting was given a broad outline of the company's plans over the next five years.
Dunnes owns 29 stores in the North, many of which are not in key positions. Although its textile operations are performing well, it is said that UK multiples such as Sainsbury, which has three stores in the North, are putting the squeeze on the group. One source said Sainsbury's turnover for those stores was almost the equivalent of all Dunne's stores turnover in the North.
The arrival of Tesco has also affected margins in the North. However, it is understood that staff were told Dunnes was performing extremely well against Tesco in the Republic as there appeared to be a consumer backlash against the British multiple.
Dunnes has 10 stores in Britain, purely textile operations, and its strategy is to locate beside large food stores. Its three stores in Spain - two in Fuengeurola and one in Malaga - are understood to be extremely profitable. Mrs Heffernan's son Michael heads up the company's overseas operations.
The company, which has a huge turnover of managerial staff mainly at junior manager level, acknowledged the problem and said it intended to deal with it. It is understood that at least 250 trainee managers leave the company each year. It is also understood that in recent weeks one of the company's senior personnel managers left, although he was only appointed less than a year ago.
