RETAIL TRENDS:Food, glorious food, there's nothing quite like it for driving demand in the retail sector, writes Alanna Gallagher
THE BOUTIQUE supermarket, a blend of old-fashioned convenience store with gourmet product ranges, has captured the hearts and wallets of the shopping public. Credit-rich and time-poor consumers want ready-to-eat food that tastes home-made.
"Supermarkets in all shapes and personalities are looking for strategic locations with high spending power in both morning and evening," says Donald C McFetridge, head of retail studies at the University of Ulster at Coleraine.
"One growth area is ready meals where own label brands are the most profitable," says McFetridge.
Marks Spencer is the original of the species and has inspired similar ranges in Dunnes Stores, Tesco, Superquinn and now even at Centra. "The ping generation want value added content such as the scientific breakdown of the meal they're reheating, carbohydrates, protein and fats," he adds.
"Organic produce has more authenticity," says Dr David Lewis of The Mind Lab and author of The Soul of the New Consumer. "In a blind tasting consumers couldn't tell the difference between an organic apple and a traditionally farmed one," continues Lewis. "But they prefer the experience of buying the organic option." To wit the success of Fallon Byrne on Exchequer Street who've been copied endlessly.
Meanwhile Ranelagh in Dublin is an interesting case study. Centra and Spar have both had extreme makeovers with Centra supersizing its floor space from 214sq m (2,300sq ft) to 465sq m (5,000sq ft). The convenience chain now has 450 stores nationwide and has announced that it's also getting into the ready-to-cook market. "Our 'Meals in Minutes' are a million miles from the breakfast roll," says Sue Lamon-Diver, corporate communications manager for Centra.
The advent of Superquinn into the shopping mix has upped the ante in the village. "Ranelagh is an affluent and a growing market and not strong in terms of the multiples," says Superquinn's marketing director, Valerie Rice. "Because of the proximity of the Luas we have a lot of hop-on, hop-off shoppers."
Up the road is Morton's, the family grocer on Dunville Avenue, and one of the last independent supermarkets in the capital. While the family values aspect was a selling point, its interior and 1970s tills had gotten tired. The 4,300sq m (46,284sq ft) shop has almost doubled in size to 8,200sq m (88,264sq ft).
The store has expanded its niche specialists by inviting Lawlor's butchers of the Upper Rathmines Road to set up shop in-house.
"As an independent we've learnt to become quite self-sufficient making our own ready meals, bread, cakes, juices, soups and fruit salads," says Paul Whitty, Morton's store manager.
Convenience is king. Nearby on Morehampton Road, Donnybrook Fair's flagship store stands at almost 650sq m (7,000sq ft). And the company is in expansive mode. Their Upper Baggot Street store has been extended and now has a floor area of 465sq m (5,000sq ft). A new premises is due to open in Greystones in August and Donnybrook Fair has also acquired the KCR shop on the Kimmage Cross Road where planning is in to redevelop the site to accommodate a shop of up to 1,115sq m (12,000sq ft) over two floors.
"Fresh foods are the most profitable but also carry the heaviest wage costs," says Stephen Carr, manager of the Morehampton Road store. "Customers want home-made food that's ready to eat. We produce everything from scratch; creating 60 types of ready meals, 30 types of bread and 60 types of salads, all from our purpose-built kitchens under the store."
Another interesting micro climate is Camden Street. It's an old traditional street where the competition is hotting up with Fresh The Good Food Market, Tesco Express and Centra as well as Liston's all offering food. "Under the Fresh brand we appeal to a wider demographic," says the company's chairman, Noel Smith.
"We're an urban supermarket," says Conor Whelan, chief executive of Fresh The Good Food Market and former MD of Spar. "Many of our shoppers are on foot."
One-third of their stores are dedicated to fresh food, where margins are higher. "Ready-to-cook meals, such as meatballs in tomato sauce and lamb stir-fries, where all the dirty work is done but you still get the emotional high of a home cooked meal, are big business," continues Whelan.
Fresh The Good Food Market is a boutique business - small relative to the big box peripheral supermarkets but large relative to the traditional convenience store. Fresh The Good Food Market also has outlets at Northern Cross on the Malahide Road, Smithfield and Grand Canal Quay. Sizes of the stores range from 604sq m (6,500sq ft) to 1,300sq m (14,000sq ft). The company is also about to expand and rebrand a Mace store in the IFSC.
"We get a lot of contact from commercial property developers," says Conor Whelan. "They like the fact that they can include an upmarket into their development. It gives their project cache. Both Grand Canal Quay and Northern Cross in Malahide were opportunities presented to us by builders."
Demand shows no signs of slowing down. "There's always good demand from operations for properties from 3,000sq ft upwards and are aggressively chased by all brands," says Lisney's John Garvey who'd also like to see the entry of international brands, such as Wholefoods, into the food market.
