A NEW price war between the country's two biggest supermarket chains may be in prospect following the head hunting by Dunnes Stores of Mr Dick Reeves, managing director of Quinnsworth and Crazy Prices.
Mr Reeves's move came as a major surprise to the retail trade. It is seen as a determined attempt by Dunnes to regain the share of the £4 billion grocery market it has lost over the past year.
Dunnes' share of the grocery market has fallen from 21 per cent to 19 per cent since January 1995, while the combined market share of Quinnsworth and Crazy Prices has increased from 24 to 25 per cent in the same period.
Trade sources have indicated that Dunnes' grocery business has come under sustained pressure since the departure of its former chairman, Mr Ben Dunne, three years ago.
Mr Reeves's appointment is seen as part of a sustained effort to boost its market share not just at the expense of Quinnsworth, but also at the expense of Supervalu and Superquinn, the other major players in the market.
Following Mr Reeves's departure, Quinnsworth's public face, Mr Maurice Pratt, has been promoted from marketing director to managing director.
Mr Reeves is likely to use his knowledge of Quinnsworth's purchasing to strike at least as good a deal for Dunnes with suppliers as Quinnsworth is getting. There has been speculation for some time that Quinnsworth has been able to strike better deals with some of the major suppliers.
But as well as a price war on the basic commodities, industry sources have suggested Dunnes may also compete with Quinnsworth in selected up market locations. Quinnsworth has recently launched its "Premium" range of quality branded goods and Dunnes may create a similar up market brand.
As well as becoming head of grocery, Mr Reeves is also becoming a main board director of the family owned firm. Mr Reeves was not available for comment last night.
Dunnes has a reputation for operating a tight management structure, where most major decisions require board approval. industry sources believe Mr Reeves's contract with Dunnes is likely to offer him more independence.