Burke puts quality at top of Superquinn's new strategy

With a better product range and a massive investment strategy, the supermarket group is set to cause ripples in the sector, new…

With a better product range and a massive investment strategy, the supermarket group is set to cause ripples in the sector, new chairman Simon Burke tells Arthur Beesley.

Now for the reckoning. Simon Burke comes to Superquinn with a first-class business record. He thinks the Irish consumer is poorly served by the supermarket trade but knows that turning around his own chain will not be easy.

More than a year after the Dublin accountant first ran the rule over Superquinn, it is only in the last 12 weeks that he took full control of the realm. If Senator Feargal Quinn created one of the great Irish brands in Superquinn, his company was repeatedly outbid in the race for new sites and dogged competition in the boom years diminished its lustre.

Some of the 21 stores were scrappy, the distribution system wasn't working properly at all. In addition, Superquinn had taken what Burke says was the "suicidal" decision to defend itself from the German discounters by slashing the price of its very own premium ranges, such as meat.

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Burke wants to put all that behind Superquinn, with a new emphasis on quality, an enhanced product range and a multimillion euro investment programme.

He won't reveal the size of his own equity stake in the Select Retail Holdings consortium that paid €450 million for the chain, but says it is big enough "to make a difference". His involvement came through the financier Simon Cantrell, a distant relative, who asked him at a meeting in Goldman Sachs in London to take a look at Superquinn.

That was in August last year. The deal was done by November, when Burke convinced Senator Quinn at meeting in AIB that the consortium did not plan to close the supermarkets to make way for apartment developments.

Still, there is a preponderance of property people in the group. In addition to Cantrell, it comprises developers Bernard McNamara and Gerry O'Reilly, property consultants David Courtney and Bernard Doyle and tax consultant Kieran Ryan.

Burke is adamant that Select Retail is not a group of asset-strippers but a major aspect of the new Superquinn will be the leveraging of its property assets. While the most likely locations for the property developments on the supermarket sites are at Ballinteer and Knocklyon in Dublin, Burke says any apartment developments will be made hand-in-hand with the revamp of the supermarkets.

The place of underperforming outlets in the chain will be assessed on a case-by-case basis.

In addition, Superquinn has declared itself to be back in the market for new sites. Its backers have acquired a site in Rathgar, south Dublin, due open before the end of the next year.

With a €3 million revamp of the Blanchardstown store to start next month, Burke says it will soon become clear whether the new format is working. If it does work, the new look will go to the rest of the stores. The template for the design is somewhere between those used by the top-end US chains Whole Foods and Wagman's and the Dutch group Albert Heijn. To a lesser extent, the design will also nod to Carrefour of France and Sainsbury's of Britain.

Whole Foods is known in its home market as "whole pay- cheque", but Burke says the drive to pitch Superquinn at the very top of the market will not see it outdone on price.

"Nobody should feel they have pay a premium to shop in Superquinn. I know that people have felt that in the past," he says.

While Superquinn will not be cheap for everything, he adds that the Select Retail Holdings consortium has cut the margin on its top 500 lines since the takeover deal closed in August.

Burke aims to build the business with new product ranges not already available to the Irish shopper.

"One of the things that I think is very striking still about the Irish market for food is that you still don't get as good a proposition from the grocery trade as our counterparts in other parts of Europe or indeed in the States. So if you look at the range of food that is on offer, the year-round availability of seasonal product and the general standard to which those products are produced, there's quite a lot that's still missing here," he says.

"I think the Irish consumer is still getting a poor deal, a proposition that's less interesting and less sophisticated than it deserves. Given how much more sophisticated Ireland has actually become in the past while, I think the market is absolutely ready for an offer that has more authority, that has more range and more interest than what's been there traditionally."

Burke sees opportunities to sell more fruit and vegetables year-round, more "well-being" and artisan products and the chance to offer a broader range of ethnic foods. "People are now travelling so much more . . . it's not uncommon to find in many, many supermarkets all over the world ranges of food that hail from the Far East, the Middle East, South Asia, the Latin countries and so forth. We're very poorly served when it comes to that kind of product," he says.

"I was in Carlow the other week and I was talking about Indian food. With my colleagues I was saying I don't know how big Indian food will be in Carlow; it's not something we might sell as much of. They said: 'We've five Indian restaurants in town now.' To my mind that symbolises how much change there has been. When I left Dublin 20 years ago, there weren't five Indian restaurants in Ireland."

That's all well in principle, but Burke doesn't expect an easy ride. First out with the counter-attack was the mighty Tesco, which made plans to accept the Superquinn discount vouchers that are core to its Christmas campaign. While Tesco cancelled the initiative, Burke knows the big British beast is unlikely to drop the ball twice. He has not yet met the Dunnes Stores boss Margaret Heffernan, but professes admiration for his biggest Irish rival. Such praise does not come lightly from the man who led the successful relaunch of the iconic Hamley's toy store in London. But if Burke made his name with Hamley's, his entré into the big time came in 1988 when Sir Richard Branson appointed him to head the ailing music retail arm of his Virgin empire. When Burke took control of Virgin Retail, the chain had nine shops, annual losses of £2 million (€2.9 million), and sales of £40 million. By 1996, it was making profits of £18 million on sales of £500 million at 300 shops.

From practically a standing start, with only 1 per cent of the British market, the chain took 25 per cent of the market within eight years. This is Burke's proudest achievement in business. He knows Branson well enough to know that his "one-off" entrepreneurial verve is similar to that of Feargal Quinn, but has met others in business who impressed him more. Chief among these was David James, the well-known company doctor.

Burke never intended to stay in London when he left Dublin for a six-month stint in 1981. He returns to a country transformed by a boom in which a new found sense of corporate confidence can be seen everywhere.

The irony in Burke's return home is that his introduction to work was as a youthful part-timer in Dunnes Stores' Henry Street branch in the 1970s. If that suggests that the shelf-stackers should never be underestimated, Burke says a key test in a turnaround is the extent to which staff feel better about their place of work. He will be looking for smiles behind checkouts.

 Factfile

Name: Simon Burke.

Job: Executive chairman of Superquinn.

Age: 47.

Education: From Rathfarnham, Burke trained as an accountant with Dublin firm Binder Hamlyn after he finished school at St Mary's College, Rathmines.

Career: He moved to London in 1981 with Coopers & Lybrand. He later worked for the Virgin group and led its retail and entertainment units. He led the turnaround of Hamley's toy shop in London. In addition to his Superquinn role, he is a director of the National Gallery in London and chairman of Majestic Wines, Britain's largest wine warehouse chain.

Hobbies: If he wasn't so busy at work, he'd study astronomy.

Why he is in the news: Select Retail Holdings has assumed full control of Superquinn, after buying the chain for €450 million from Feargal Quinn