Annual report & review 2006 - Shopic.com

Annual report 

& review 2006

Our brands 

Partner to entrepreneurial 

food retailers and foodservice 

professionals 

In the Republic of Ireland and Northern Ireland 

SuperValu – our 218 independently-owned SuperValu 

stores differentiate through strength in fresh food, a 

consistent keen value offer, relationships with local 

suppliers and the expertise of our retailers. 

Centra – the number one independent convenience 

retail chain in Ireland – 490 stores delivering fresh food, 

food-to-go and innovative services to busy consumers. 

DayToday and Daybreak – two chains of independently 

owned convenience stores in both the Republic of 

Ireland and Northern Ireland. We currently partner 

retailers in 172 DayToday stores and 94 Daybreak stores. 

Musgrave Cash & Carry – we provide delivered retail 

and cash & carry services to more than 34,000 customers 

from 11 depots in both the Republic of Ireland and 

Northern Ireland. 

Musgrave Foodservices – the first company offering 

a full multi-temperature range of products for the 

professional caterer across the 32 counties of Ireland. 

Turnover by our brands* (€ millions) 

Northern Ireland €654 

Spain €113 

Republic of Ireland 

€3,697 

In Great Britain 

Budgens and Londis – there are 74 company owned 

Budgens stores, 108 independently owned Budgens 

stores and in excess of 1,900 independently owned 

Londis stores. It is planned that all Budgens corporate 

stores will be in independent ownership by 2008. 

Great Britain 

€2,624 

In Spain 

Dialsur, SuperValu, Dialprix and Dicost – the Group’s 

Spanish operation consists of 18 SuperValu stores as well 

as cash & carry outlets and convenience stores. 

* Estimated total sales by retail partners along with sales from cash & carry outlets

Musgrave at a glance 4 

Our Chairman’s statement 7 

Interview with our Group CEO 8 

Review of 2006 14 

Retailers & local suppliers 22 

Consumers & communities 32 

Responsibility – our CSR policies 38 

Summary directors’ report 44 

Our board of directors 46 

Finance review 49 

Summary financial statements 52 

Notes to summary financial statements 55 

Our industry awards 2006 67 

Contents

Musgrave at a glance 

What is the Musgrave Group 

We partner entrepreneurial food retailers and 

foodservice professionals in Ireland, Great Britain and 

Spain. The company was founded in Cork in 1876 by 

brothers Thomas and Stuart Musgrave, and is now 

Ireland’s biggest food and grocery distributor. 

In Great Britain, we completed the acquisition of 

Budgens convenience stores in 2002 and bought the 

Londis franchise in 2004. 

We now serve more than 3,000 stores in Ireland, 

Great Britain and Spain. 

How many stores are associated with the 

Musgrave brands 

Republic 

Of Ireland 

Northern 

Ireland 

Great 

Britain 

Spain 

SuperValu 180 38 – 18 

Centra 407 83 – – 

Budgens – – 182 – 

Londis – – 1917 – 

Daybreak 94 – – – 

DayToday 66 106 – – 

Dialprix – – – 53 

How do we work with retailers 

We believe local retailers are the lifeblood of their 

communities. This is why more than 27 years ago we 

established the SuperValu and Centra brands, with the 

aim of securing a competitive independent retail sector 

throughout urban and rural Ireland. Our success is 

based on an innovative retail model which we’ve refined 

through experience and by listening to our retailers and 

their customers. Our approach is to equip independent 

retailers associated with our brands with the sales, 

marketing, IT, finance and logistical expertise that come 

with the most advanced retail business practice. We also 

leverage our scale to help them compete on quality and 

price and we work with local suppliers to satisfy a growing 

demand for fresh, locally sourced products. 

What’s different about the independent 

retailers who work with us 

Our retailers are independent, as almost all the 

outlets that carry our brands are owned by progressive 

entrepreneurs living and working in the communities in 

which they operate. These are businesses committed 

to excellent customer service and run by people who 

thrive on innovation. Owners and their staff work hard to 

ensure their stores thrive through excellence – from staff 

training to strong lines in fresh, local produce; superb 

in‐store experience to high standards of 

hygiene. 

How many people are 

employed by Musgrave and 

its retailers 

The Musgrave Group and its 

retailers have more than 44,000 

employees. Together in the 

Republic of Ireland we are 

the country’s second 

largest employer, with 

more than 24,000 

employees. 

 

Musgrave Group Plc Annual Report & Review 2006

Musgrave at a glance 

hoW Do We SouRCe pRoDuCe 

We’re committed to providing consumers with 

the local, fresh, quality produce they want. In SuperValu 

and Centra in Ireland, 75 per cent of the produce we 

sell in our stores is either produced or manufactured in 

Ireland. We also support a wide range of local suppliers 

at community level. Our strategy is to replicate this 

model wherever possible with our Budgens and Londis 

stores in Great Britain, and in Spain. 

WhaT’S ouR poSITIoN oN The 

eNVIRoNMeNTaL IMpaCT oF ouR BuSINeSS 

We are proud of our reputation for transparency 

on environmental issues. We believe we have an 

obligation to our stakeholders to report and account 

for our environmental and social performance. Our 

award-winning environmental and Social Accountability 

reports, which are independently verified by specialist 

third-parties, are public testimony to our environmental 

convictions and are a comprehensive record of our 

performance. They are available at www.musgrave.ie. 

2006 FINaNCIaL hIGhLIGhTS 

2006 2005 2004 2003 2002 

Sales to Retailer €m 4,593.5 4,393.6 3,761.8 3,341.1 2,775.1 

profit Before Tax €m 81.0 70.9 67.3 58.3 56.7 

profit After Tax €m 60.7 54.3 50.3 41.9 38.9 

Net Debt €m 186.3 325.7 375.7 383.8 457.9 

Dividend per Share cent 26.1 24.9 23.0 20.0 18.2 

Shareholders’ Funds €m 308.7 242.3 215.7 229.3 216.6 

Group Turnover (€ billions) 

Profit before tax (€ millions) 

Net debt (€ millions) 

4.39 

4.59 

457.9 

3.34 

3.76 

67.3 

70.9 

81.0 

383.8 

375.7 

325.7 

2.78 

56.7 

58.3 

186.3 

2002 

2003 

2004 

2005 

2006 

2002 

2003 

2004 

2005 


2002 

2003 

2004 

2005 


n Group turnover of €4,593.5 million, up 4.5% 

n Profit before taxation of €81 million, up 14.2% 

n Net debt reduced by €139.4 million to €186.3 million 

n Retail Partner Sales of €6.7 billion up 6.9% 

n Dividend per share increased by 5% to 26.1 cent 

5 

MuSGRAVe GROup pLC aNNuaL RepoRT & ReVIeW 2006


Our Chairman’s statement 

WoRkING ToGeTheR 

2006 has been a very important year for the Musgrave 

Group. Our business performed well and continued to 

grow at a steady pace in what was a very challenging 

commercial climate. 

The pressure to keep prices low for our retailers – while 

the cost of doing business continued to fluctuate as a 

result of an increasing payroll, energy and waste costs 

– once again required innovation, good relations with 

suppliers and a great deal of hard work. 

As a business we believe the key requirement to giving 

consumers what they want is to do things better, simpler 

and cheaper. We have many examples where we and 

our retailers are doing this – imaginative local product 

sourcing, improving our supply chain and improving stock 

management, to name but three. 

In all our markets our retailers 

continue to delight consumers by 

focusing on a personal approach, 

an excellent range, an enhanced 

shopping experience. 

It would be difficult to overstate the value of the 

collaboration and trust that are the keys to our success. 

Our retailers rightly expect a shared focus on meeting 

consumers’ needs, having a clear way of working and 

confidence that they have access to the knowledge, 

expertise, distribution, support systems and economies 

of scale they need for success in their businesses. 

Our results suggest that we’re on the right track, but 

we’re very much aware that there’s plenty more to do. 

2006 saw Group sales of €4.6 billion – an increase 

of 4.5 per cent on 2005. profit before taxation at 

€81.0 million has increased by €10.1 million (14.2 per 

cent) on the previous year. Net debt now stands 

at €186.3 million and represents 60.3 per cent of 

shareholders’ funds, compared with 134.4 per cent in 

2005. 

The full year dividend paid to shareholders was 26.1 cent 

per share. This is an increase of five per cent over the 

total dividend for 2005. 

I want to thank all our people right across the business 

who work so hard to deliver on our vision of a strong 

independent retail sector serving local communities. 

That major contribution was recognised this year when 

we received an award in the Business Success category 

of the JpMorgan Business Honours programme. 

In particular, I’ve been extremely impressed with the 

extent to which our teams have taken on board and then 

advanced the important brand work that’s taken place in 

the course of the year. This work has already helped us to 

refocus and to look at new ways to improve our business. 

Its implementation will deliver real value in the months 

and years ahead. 

hugh Mackeown 

Chairman 

7 


In practical terms, every part of our business 

puts consumers at the heart of its value 

 

proposition. Nothing is more important 


Interview with our Group CEO 

Making a difference 

Musgrave’s Group CEO, Chris Martin, reflects on his first two years at the helm 

How would you characterise Musgrave’s business 

today 

Chris Martin: We work with entrepreneurial food 

retailers to provide the consumer with a food offer that 

is different and better. Creating food businesses that 

are different and better is our DNA, and is the way we 

compete in today’s market place. 

And it’s important to understand that the four markets in 

which we operate are highly competitive. In the Republic 

of Ireland, for example, we’re talking about a growing 

retail food sector worth about €13 billion annually. 

The fact is consumer behaviour is changing – people 

want to shop more in tune with their personal values. 

They’re concerned with their own wellbeing and that of 

their families and their impact on the community. They 

want to live more sustainably and want to consume 

products and services which are more sustainable. 

Today our business isn’t just about responding to these 

changes. On the one hand, it’s about working with our 

retail partners – drawing on their local intelligence and 

experience – to anticipate such changes and to deliver 

a food business that satisfies, delights and surprises 

consumers, while generating improved revenues for 

retailers. And on the food services side, it’s about 

anticipating the needs of today’s chefs and caterers and 

using our experience and buying power to create a 21st 

century solution that addresses the very specific needs of 

this important growth sector. 

innovative ways to help independent retailers succeed in 

very competitive retail environments. 

This involves working with them to ensure quality and 

value is delivered to consumers through excellent 

products and services, supported by well‐defined brands. 

Strengthening and energising those brands has been 

something on which we’ve focused a great deal over the 

past 12 months. 

You’ve now been CEO for two years. How has the 

business changed 

CM: The past couple of years have been about building 

on our strengths to develop and implement a consistent 

vision right across our business. This is especially 

important now we have multiple brands operating 

in four distinct markets – the Republic of Ireland, 

Northern Ireland, Great Britain and Spain. 

In all these markets – and with all our brands – my 

priorities have been to drive up standards and find 

For me, effective branding is all about clarity and focus. 

It’s about recognising and leveraging our strengths. A 

good example is the ‘real food, real people’ concept 

associated with SuperValu. This tells consumers 

exactly what this brand is all about: when you go into a 

SuperValu store, you’ll find real, independent retailers 

with their own ideas about how to deliver value and 

innovation to their customers. You’ll also find real bakers, 

real butchers, real cheese experts and experienced 

greengrocers. It’s an important differentiator for 

consumers and a great organising principle for the 

business. 

‡ 

 


We’ve honed an approach to retail that brings real 

value to retailers, consumers and local communities 

10 

What does this kind of consistent vision mean for 

consumers 

CM: Consistently high standards coupled with innovation 

means our retailers are now able to compete more 

effectively. More consumers experience better service, 

more fresh local produce and quality convenience 

shopping within the communities in which they live and 

work. 

In practical terms, it means every part of our business 

puts consumers at the heart of its value proposition. 

Nothing is more important. 

It’s about driving innovation to create an even better 

local shopping experience for people tired of bland, 

impersonal supermarkets. And unlike the multiples our 

convenience offering is not a cut down supermarket 

– these are true convenience stores where we have 

developed an excellent fresh range and key partnerships 

with award‐winning local suppliers. 

And because a consistent vision means driving up 

standards right across the business, not everything we 

do is immediately apparent to consumers. For example, 

May 2006 saw significant enhancements to our supply 

chain, with the official opening by the Taoiseach of a 

150,000 square feet ambient warehouse and distribution 

operation in Kilcock, Co. Kildare. This €35 million facility 

– processing more than 280,000 cases of ambient 

groceries a week – operates behind the scenes. It 

certainly helps our retailers by enabling just-in-time 



ordering and means even better availability for their 

customers – but it’s the kind of innovation that isn’t 

directly visible to shoppers. 

How are Musgrave retailers coping with increasingly 

competitive trading conditions 

CM: Retailers are winning when they focus on providing 

the consumer with an offer that differentiates them from 

competitors and directly addresses local needs. 

A good example in Great Britain is Jim Boggon, a Londis 

retailer in Edinburgh, who nearly sold‐up shop when his 

business came under threat from the multiples. Instead, 

with our help he revamped his store, focused on what he 

is good at – fresh and food-to-go – and his turnover is up 

140 per cent despite the competition. Jim’s story is one of 

many that are testament to the fact that if you provide the 

consumer with excellent product, and excellent service, 

and deliver that service with passion, it makes a difference. 

These things can achieve extremely positive results. 

It’s important to remember that all our retailers live and 

work in the communities they serve. With our help they 

can shape their businesses to address markets they know 

and understand in a very direct way. 

you combine turnover of our retail partners across all 

four markets they had a turnover of €6.7 billion. 

In Ireland, Centra retailers achieved combined sales 

of €1.2 billion, up 17 per cent. 2006 was also a record 

year for SuperValu’s retailers in Ireland with sales in 

excess of €2 billion for the first time, up 11 per cent. 

Daybreak and DayToday sales in the convenience market 

across the island of Ireland increased by 16 per cent 

to €264 million. In Northern Ireland, SuperValu and 

Centra retail partners achieved strong growth in sales of 

€474 million, up eight per cent on 2006. 

In Great Britain Budgens and Londis retailers recorded 

robust sales of €2.6 billion. 

What’s more, it’s clear the independent model is really 

working in that market. The independently owned 

Budgens stores performed particularly well and 

recorded sales growth of 88 per cent with the number 

of independent stores increasing to 108. In Spain, 

SuperValu and Dialprix independent retailers recorded 

sales of €113 million, up eight per cent in 2006. 

The start of 2007 has seen our businesses performing in 

line with or ahead of budget. 

And because our retailers own their own stores, they can 

bring their personalities and flare to their businesses. If 

you go to Scally’s SuperValu in Clonakilty, you’ll find the 

longest cheese counter in Ireland. Go to Raj Chandegra’s 

Londis in the GlaxoSmithKline building in Brentford 

and you’ll find a store tailored to a demanding business 

community of 3,000 workers, Quelly’s in Kilrush where 

you’ll find one of the best fish counters in the country, 

or Terry and Melanie Philpott’s award-winning Castle 

Cary Londis store that succeeds with a special blend of 

community active retailing. 

This level of innovation and diversity, this consumerfocused 

retail simply isn’t possible for multiples tied to 

uniform, nationwide formulas. 

Will this type of innovation help grow the business 

This implies there’s now real momentum behind 

your UK brands. To what do you attribute that 

success 

CM: The past 12 months have certainly seen significant 

progress in Great Britain. For example, I’ve been very 

pleased with the high levels of interest from independent 

retailers who want to own a Budgens store. This means 

we are on schedule to have all these stores in the hands 

of independent retailers by 2008. 

The point here is that our retail partners in Great Britain 

have recognised that through our long experience in 

Ireland, we’ve honed an approach to retail that brings 

real value to retailers, consumers and local communities. 

Put another way, as a Group we make a considerable 

impact not only on the prosperity of the country, but on 

the social fabric of Ireland Inc. 

CM: Well, we’ve had a very satisfactory set of results for 

2006, with Musgrave Group sales of €4.6 billion and if 

These are the values and experience we are starting 

to bring to communities in Great Britain. I find it ‡ 

11 


Many of our stores now lead with fairly 

priced, top quality local produce, and our 

increased focus in this area has really raised 

12 

the standards of local community shopping 



exciting to take a brand like Londis on a journey that 

sees steadily enhanced range, value and services for 

consumers that means more business for retailers. A 

good example of this is the improved fresh range we 

introduced to Londis stores in 2006. 

It will come as no surprise to Irish people that our Centra 

brand has made a huge contribution to establishing 

Ireland as a world leader in the convenience market 

– and that we’re bringing even greater consumer choice 

to Ireland’s convenience sector with the more recent 

success of our Daybreak brand. 

How are retailers improving their offers to 

customers 

CM: We’ve worked hard with retailers to improve 

significantly the quality and range of fresh food on offer. 

In addition, many of our stores now lead with fairly priced, 

top quality local produce, and our increased focus in this 

area has really raised the standards of local community 

shopping. 

We’ve also concentrated on responding to local needs 

and encouraging retailers to incorporate a wide range of 

additional services. Take our Centra forecourt in Lee’s 

Charleville – it is in the vanguard of Centra innovation 

with hot food including a wokery made up to eat in or 

take away; you can also get a cappuccino, latte or a fruit 

smoothie. If you decide to dine in you can watch Sky 

News, re-charge your mobile phone free of charge or 

check your emails by availing of the WiFi hotspot. In 

Great Britain, our new wave of Budgens stores are also 

leading the way with this strong emphasis on consumer 

services – from in-store dry cleaning services to tasting 

and demos by specialist suppliers. 

And this is just the beginning, with new stores coming 

on board over the next few months. Although our stores 

are already recognised as some of the best convenience 

brands worldwide, we want to continue to push the 

boundaries, so they become the de facto convenience 

brands of choice, by consistently anticipating changing 

consumer needs. 

Why is it so important that local stores thrive in the 

heart of communities 

CM: Partly it’s about choice. The lifestyle shift – with 

both partners in half of all households now working 

outside the home – continues to build demand for 

convenient, easily accessible stores, with healthy, 

ready‐meal solutions and food-to-go. For many families, 

the traditional once-a-week household shop is being 

replaced by multiple visits to convenient stores. 

But it’s also about building and maintaining sustainable 

communities. The small independent store is so often 

the lifeblood of our communities and in many cases 

the decline of a village or town is directly linked to the 

closure of the local independently owned shop. 

Through our network of independently owned local 

stores, we have seen the positive contribution a store 

brings to the community – from supporting local 

producers, to creating vibrant, sustainable, economic 

infrastructures that encourage local trade and 

provide a place for sharing news and vital local 

information. 

Local store owners take on a responsibility for the 

communities in which they operate. They care about their 

customers, their local suppliers and the environment that 

surrounds them. 

What are your priorities for the year ahead 

CM: As always, my priorities centre on working with our 

retailers to anticipate consumer demands and to meet 

those demands with innovation, quality and value for 

money. And right now I believe there’s a real sense of 

urgency in our mission. 

Operating in the heart of local communities, much closer 

to consumers than the multiples, our retailers are ideally 

positioned to provide this different and better shopping 

experience. It’s our job to give them whatever they need 

to deliver that experience to their customers. 

13 


Review of 2006 

14 



This is a year in which we have developed and strengthened 

our brands, expanded our product range, added new lines 

and continued to drive innovation in the quality of the 

in‐store experience. 

We have taken great strides in mixing the finest local 

and regional produce with quality international brands 

and foods, developing our own quality brands, enabling 

our retailers to offer consumers a more compelling 

shopping experience. 

We are delighted with the business performance in all 

our markets. We currently partner more than 3,000 

locally‐owned stores through five trading divisions 

across three countries. During 2006, we continued to 

deliver to our retail partners an offer which is constantly 

evolving to satisfy consumer needs and which places 

dynamic entrepreneurial businesses at the heart of local 

communities. 

Achievements in 2006 included the ongoing expansion 

of the SuperValu, Centra and Daybreak retail brands in 

Ireland, progress with our strategy of divestment 

of Budgens outlets in Great Britain which is on 

target for completion by 2008 and the ongoing 

development of our retail partnerships in Northern 

Ireland and Spain. 

With the support, hard work and innovation of our 

people and our retailer partners we continue 

to improve standards of customer care and 

the all-round customer retail experience. 

The sales growth they have achieved 

is testament to the success of our 

partnerships. 

‡ 

15 



16 

Our business in the Republic of Ireland 

In 2006 our SuperValu and Centra brands generated 

combined retail sales growth of 13 per cent to 

€3.2 billion – a strong performance including growth 

in market‐share in competitive trading conditions – and 

during a year of just 1.8 per cent food price inflation in the 

marketplace. 

These results are, as ever, the outcome of hard work and 

innovation from our local retailer partners, coupled with 

even greater emphasis on offering consumers excellent 

product range and choice, excellent value for money 

and local, fresh, quality produce. They also reflect our 

success at evolving our brands, store environments, 

products and our community focused retail model, to 

match the changing needs of Irish consumers. 

In 2006 we greatly extended our fresh food offer 

in response to the needs of time‐pressed and 

health‐conscious consumers, along with introducing 

in‐store innovations including smoothie and juice bars, 

soup and salad bars, wokeries, hot ciabattas, a summer 

eating range, electronic menu boards and free WiFi 

access to name but a few. 

Our business is all about responding to the rapidly 

changing lifestyles of today’s consumer, to meet their 

demand for easily accessible and convenient stores, 

innovative local service and high‐quality food at the most 

competitive prices. 

A number of important milestones were achieved in 

2006, including the opening of our 400th Centra store 

– one of 47 new Centra outlets opened during the year. 

These new businesses, along with the revamp of a further 

64 Centra stores, represent an additional 141,000 square 

feet of retail space and combined annual retail turnover 

of €120 million, bringing more choice and convenience 

to local communities and enhancing our overall buying 

power and competitiveness. All in all, 2006 has been a 

highly successful year for Centra – reflected in the 17 per 

cent growth in retail sales to €1.2 billion. 

SuperValu also had a record year with sales passing 

the €2 billion turnover mark for the first time, an 

increase of 11 per cent. This performance milestone 

reflects our success at differentiating the SuperValu 

brand. SuperValu’s strength in fresh food – particularly 

Irish meat and produce – its honest and consistent 

pricing resulting in a consistently keen value offer for 

consumers, and the passion, expertise and flair of 

our retail partners and their staff has delivered a very 

satisfactory performance in 2006. 

The continued appetite of our retailers to invest in 

upgrading their store standards saw 16 existing stores 

extended, adding 86,000 square feet of retail space at a 

cost of €63 million. 

In 2006, six new SuperValu supermarkets opened 

in Lusk and Swords, County Dublin, Belgard Square 

West, Tallaght, Dublin 24, as well as in Beechmount in 

Navan, County Meath, Nenagh, County Tipperary and 

Ballyconnell, County Cavan. These new stores represent 

an investment of €36.5 million from a combined 70,000 

square feet of new retail space. Our reach and scale was 

further strengthened when the Pettitt’s supermarket 

group joined the SuperValu family in January 2006. 

Pettitt’s five stores mean an additional €85 million retail 

turnover and 80,000 square feet of food retail space. 

Our commitment to Irish based 

producers is clear from combined 

Irish retail sales of €1 billion of 

fresh food over the past year. 

Across our entire range, 75 per cent of everything 

sourced was either produced or manufactured in Ireland 

– representing a commitment to Irish suppliers of more 

than €2.3 billion at retail level in 2006. 

Our business in Northern Ireland 

In a decade of trading in Northern Ireland with SuperValu 

and Centra, we have established a network of more than 

120 stores, all of which are now owned and operated by 

independent retailers. 

The performance of our business model, together with 

our comprehensive range of retailer support services, 

continues to attract progressive retailers to the Group, 

with an additional 12 new stores and 13 new off licences 

having opened in 2006. The business was further 

strengthened by an additional £14 million investment in 

new and existing stores during the year. ‡ 


Our business 

is all about 

responding to 

the rapidly 

changing lifestyles 

of today’s consumer, 

to meeting their 

demand for easily 

accessible and 

convenient stores 17 


In an exciting new 

development, in 

September 2006 we opened Ireland’s 

first cash & carry outlet dedicated to 

the supply of fresh food and catering equipment 

18 

to the food service industry, in Ballymun, North Dublin 



Our innovative Market Street concept, a compelling 

environment where caterers and other food professionals 

can source a wide range of fresh food produce at our 

dedicated cash & carry outlet in Ballymun, North Dublin. 

cash & carry – foodservice 

new markets, new services 

We pioneered cash & carry in Ireland, opening our 

first outlet in 1961. Musgrave Cash & Carry and 

Foodservices brands now provide delivered retail 

and foodservices as well as cash & carry services to 

more than 34,000 customers from 11 depots, with a 

turnover exceeding €500 million. 

We have continued to invest heavily in our brands and 

support services, with notable initiatives completed in the 

areas of range development, tactical marketing, in‐store 

point-of-sale and logistics efficiency improvements. 

Substantial reductions in retail operating costs were also 

realised for our retail partners, through the effective 

leveraging of our Group scale, notably on utilities, 

insurance, bank charges and payroll management. 

Our retail offering continues to find favour with the 

Northern Ireland consumer, with like-for-like sales 

increases of more than seven per cent achieved in both 

our SuperValu compact and Centra formats in 2006, and 

with total retail sales of £323 million, representing an 

increase of 8.4 per cent on the previous year. 

‡ 

The demands of our cash & carry customers are 

changing and we continue to evolve the business 

to meet these demands, address new markets and 

maintain Musgrave’s position as the leader in this 

space. This is why our foodservices business was 

created in 2001 to service pubs, hotels, restaurants 

and the contract catering sector in Ireland. We now 

provide a one-stop service that can offer frozen, 

chilled & ambient and non-food requirements in a 

single delivery, giving us a market leading role in this 

€3.5 billion a year industry. 

Designed by catering professionals for catering 

professionals, this service provides a complete 

supply solution, with a nationwide network of 

facilities in all major centres including Dublin, Cork, 

Limerick, Waterford, Derry and Belfast. We are now 

the first company offering a full multi-temperature 

range of products for the professional caterer across 

the 32 counties. 

In an exciting new development, in September 

2006 we opened Ireland’s first cash & carry outlet 

dedicated to the supply of fresh food and catering 

equipment in Ballymun, North Dublin. 

This is the first of a planned chain of cash & carry 

outlets focusing on the foodservice sector and 

further evidence of our commitment to this vibrant 

and rapidly expanding sector. 

Our DayToday and Daybreak delivered retail networks offer 

a range of options for retailers and consumers, ensuring 

continued competition and vibrancy in the Irish retail 

sector. There are currently 172 DayToday stores in the 

island of Ireland, with more than 3,000 people employed 

across the network and current annual sales amounting 

to €264 million. The newest addition to our family of Irish 

retail brands, Daybreak, recruited close to 100 retailers 

within 12 months of operation. 

19 


20 



Our business in Great Britain 

In Great Britain, we completed our acquisition of 

Budgens convenience stores in 2002 and bought 

the Londis franchise in 2004. Our aim is to replicate 

the success of our Irish model by helping to create 

exciting retail businesses that play a strong role in local 

communities in Great Britain. This means enabling 

independent retailers to meet the unique demands of 

the communities they serve with a distinctive blend of 

products and services and increased emphasis on local 

sourcing. 

Over the past 12 months we have continued to sell our 

corporately owned Budgens stores to independent 

retailers. This is in keeping with our overall philosophy of 

supporting entrepreneurial retailers in all the markets in 

which we operate. Across the network of Budgens stores, 

local retailers are now being recruited and the transfer 

process is well under way. We are taking our time with 

this process, ensuring that in all cases we match the 

appropriate retailer with the right type of store. 

At the end of 2006, 74 stores remained in corporate 

ownership, while 108 stores are now operated 

independently. We expect all Budgens stores to be 

owned by independent entrepreneurial retailers by 2008. 

Budgens offers customers quality fresh foods, great range and 

local produce with that all-important local convenience 

We are pleased with like-for-like growth of 3.8 per cent 

from our Londis business. 

During 2006 our independently operated Budgens 

stores achieved an impressive like-for-like growth of 

5.5 per cent, demonstrating the success of our business 

model. 

Our business in Spain 

Dialsur is our Spanish wholesale and retail distribution 

business based in the Alicante region of South-East 

Spain. 

We are seeing how independent retailers working with 

a model that leverages their flare and local knowledge 

can compete and succeed in an extremely challenging 

market. Unlike the multiples, our convenience offering 

is not a cut‐down supermarket but a true convenience 

store. Similar to our approach in Ireland, we are working 

with local producers under initiatives such as Tastes of 

Anglia, Taste of Sussex, Taste of the West, and Heart 

of England Fine Foods to bring local products to local 


We now serve more than 1,900 independently owned 

Londis stores. As we continue to reshape our business 

in Great Britain, our focus remains on the quality of 

these businesses, store format, logistics, supply chain 

management and produce. Our aim is to ensure that all 

our Londis stores are compelling retail environments. 

To grow our presence in this market, for the past few 

years our focus has been on constructing new SuperValu 

supermarkets in locations that are convenient to the 

high population growth areas of the Valencia region and 

Murcia. 

In 2006 we increased the number of our Spanish 

SuperValu stores to 18. Our Dialsur operation also has a 

network of 53 Dialprix stores, 30 of which are operated 

by independent retailers, as well as a chain of 17 Dialsur 

cash & carry outlets. Sales across the business in 2006 

were €181 million – up four per cent. 

As in all the markets in which we operate, our aim is 

not to own the retail stores in the longer term, but to 

continue to seek suitable retail entrepreneurs to partner 

in the region. 

21 


Different & better – retailers & local suppliers 

22 



Local retailers and suppliers are the lifeblood of their 

communities. This is why we aim to secure a competitive 

independent retail sector that delivers fresh local produce 

in all the cities, towns and villages in which we operate. 

The retailers that partner with Musgrave are 

independent. Almost all the outlets that carry our 

brands are owned by progressive entrepreneurs living 

and working in the communities in which they operate. 

These are businesses committed to excellent customer 

service run by people who thrive on innovation. 

We are working closely with our retailers, to provide 

them with cutting-edge supply-chain logistics, 

centralised purchasing and distribution systems, staff 

training and brand marketing. 

We now support more than 3,000 stores and together 

with our retailers employ more than 44,000 people 

in three countries – from Aberdeen to Alicante, Achill 

Island to Abergavenny – and all are situated in the very 

heart of the cities, towns and villages in which they 

serve. 

Bringing high quality fresh foods to these local stores 

is one of the ways our business delivers value to 


We only work with suppliers that can guarantee the 

finest quality products and highest possible standards 

of food safety and hygiene. The new SuperValu 

Supreme range offers a selection of more than 80 

products sourced from expert producers, all of 

whom use the very finest ingredients. 

Wherever possible we source locally – for 

example, in Ireland more than 75 per cent of 

produce is produced in Ireland. In addition, we 

continually monitor suppliers large and small to 

ensure they consistently meet our exacting standards. 

‡ 

23 


SuperValu Deansgrange 

Service is always right at the top of our agenda. It’s what 

differentiates us from the multiples and it’s the reason why some 

of our customers have been shopping at this store for 20‐odd years 

24 



SuperValu – real food, real people 

Whether they’re quizzing the in-store wine expert or 

listening to one of the bakers extolling the virtues of 

the ever popular Guinness bread, everywhere you look 

in SuperValu Deansgrange customers are deep in 

conversation with staff. ‘Service is always right at the top 

of our agenda,’ says Rachel Twomey, general manager 

of the Dublin southside store. ‘It’s what differentiates us 

from the multiples and it’s the reason why some of our 

customers have been shopping at this store for 20‐odd 

years.’ 

While it’s the recent stunning refit that has an immediate 

impact at Deansgrange, it doesn’t take long to realise 

that it’s the sustained investment in staff and training 

that makes this store so special. ‘Having an informed, 

motivated team is at the heart of our success,’ says 

Rachel’s father, Cormac Twomey. ‘This is why we’ve made 

a point of either employing or training specialists right 

across the business.’ 

As well as qualified butchers, the wine expert, deli staff 

and bakers, the Twomeys recently opened a professional 

fish counter in the store, managed by award‐winning 

Cavistons of Glasthule and employing a member of their 

staff who is an expert in fish produce and seafood. 

It’s this level of detail that helped SuperValu 

Deansgrange win Checkout’s coveted Best in Fresh 

award 2006. The judges concluded that while the store 

hits extremely high standards in all departments, it is 

especially strong in its selection and display of fresh local 

produce. 

developed a real niche introducing and promoting local 

suppliers. Customers really appreciate the community 

connection.’ 

In September the store held events, at which local 

suppliers came to the store to talk about their produce, 

took questions from customers and encouraged 

all‐comers to taste their wares. Cormac explains that 

maintaining a dialogue with his customers also means 

engaging in a wide range of community initiatives, 

including arranging trips and Christmas parties for the 

elderly and supporting local schools and charities. 

After 30 years in the business, Rachel’s father is more 

than happy to let his daughter tackle the day-to-day 

running of the store and is delighted by the drive and 

innovation she’s brought to the business. In her first year 

Rachel made the headlines by introducing Ireland’s first 

same-day internet grocery delivery service. 

‘You can never stand still in business,’ Rachel explains. 

‘It’s why we’ve recently increased our floor space and 

enlarged and upgraded our off-licence. But with all the 

changes, the standards of service and products must stay 

consistently high. 

‘Being Best in Fresh means 

delivering the same fresh offer in 

the evening as when you open at 

‘Our mantra is local store, local customers and local 

produce,’ says Rachel. ‘Over the past few years we’ve 

seven.’ 

‡ 

Local food for local stores – Folláin 

Folláin, suppliers to SuperValu, is the Irish word 

for wholesome and Peadar O’ Lionáird’s company 

– located in the rural West Cork heartland – is exactly 

that. It conjures its fresh fruit preserves, marmalades, 

jams, relishes and chutneys from 100 per cent natural 

ingredients. 

Peadar explains that a century-old Irish recipe, passed on 

through several generations, was the secret to Folláin’s 

first product – a chunky grapefruit 

marmalade which was launched back 

in 1983. 

Building on this modest beginning, 

hand preparing the fruit and cooking 

in kitchen-style conditions, Folláin has 

grown steadily, increasing its range of preserves and expanding 

to what is now a state-of-the-art, modern food factory, built and 

equipped to the highest quality standards. 

25 


Centra Parnell Street 

‡ 

26 



Centra – Bright ideas for everyday living 

The opening of the 400th Centra store in the Republic 

of Ireland in November was a major milestone in 2006. 

Noel Dunne’s 260 square metre Centra on Parnell Street 

in Dublin claimed the magic milestone and was one of 

a remarkable 47 new Centra stores that opened in the 

Republic of Ireland during the year. 

Noel, who lives as well as works in the area, has been in 

the retail industry for more than 20 years. His store is part 

of the €50 million regeneration of the Ilac centre area 

that faces on to Parnell Street and Moore Street. 

The new store is bright and airy with high ceilings, large 

windows and plenty of innovative features to capture the 

constant passing trade. 

‘The plasma screens and electronic menu boards 

really catch the eye and draw in crowds – especially in 

the evenings,’ Noel explains. ‘Our focus is very much 

on time-stretched consumers, so we’re offering our 

customers a strong, fresh food-to-go range including 

instant meals and hot foods – there is also a smoothie 

bar, a deli counter and a wokery.’ 

And to support the store’s impressive wine selection, 

Noel has installed a touch‐screen ‘wine expert’ to help 

customers make more informed choices. ‘This was a 

real experiment,’ says Noel. ‘It certainly looked the part 

next to the racks, but I wasn’t sure 

how much it would be used.’ The 

innovation has turned out to be a real 

success. ‘It first came into its own 

on special occasions 

like Christmas and 

Valentine’s Day. 

Customers used it to 

make sure they got 

the perfect wine in 

their price range. Now 

it’s used all the time.’ 

The huge investment 

in the area including 

the regeneration The connoisseur’s touch: an 

of Moore Street 

in‐store electronic ‘wine expert’ 

has re‐established enables customers to pick the 

the area as a key 

perfect wine within their budget 

shopping area in 

Dublin city centre. ‘We researched thoroughly before 

opening and the preparatory work has really paid off,’ 

Noel explains. ‘All the new stores that have been kicked 

off by the regeneration have increased footfall in the area 

very significantly and we’ve made sure we have the right 

offer for our customers.’ 

Plans for the year ahead include 

a pavement seating area in front 

of the store, so Noel’s customers 

can enjoy their lattes and paninis 

al fresco over the summer. 

‡ 

Local food for local 

stores – Carty Meats 

Ted Carty (left) runs Carty Meats, an 

Athlone-based business started almost 

50 years ago by his father Oliver. Ted is 

passionate about his product, constantly 

extolling the virtues of Irish pork and the value of traditional 

processing and cures. 

This focus and commitment has translated into quite 

astonishing growth for this Irish business. Turnover has 

rocketed from €792,000 in 1995 to in excess of €32 million in 

2006, which translates into an awful lot of bacon – 2.5 million 

rashers in fact. 

Working with SuperValu, at the end of 2006 Ted introduced a 

new premium range of rashers called SuperValu Supreme, with 

each individual rasher pack carrying the photograph of the 

actual farmer who produced the bacon. This will be made 

possible by the traceability systems already in place at 

Carty Meats. 

The top quality back bacon is cured by hand using sea salt and 

left to mature slowly for a fuller flavour and succulent taste. 

27 



Budgens – helping you shop locally 

In November 2006, independent retailers Andy and 

Hitesh Patel opened a new look Budgens store at Virginia 

Quays in the heart of London’s developing Docklands. 

The 4,500 square foot store is the first retail outlet to 

open in a major new housing development sited on the 

doorstep of East India station on the Docklands Light 

Railway, with a view of the Millennium Dome. 

In keeping with its highly urban environment, the Patels’ 

new store is slick, sleek and contemporary. 

the local community including, for example, the recent 

addition of a dry cleaning service. 

And innovative services are matched with a broad, highly 

targeted product range, including premium brands like 

Duchy, Cranks, Burts and Green & Black. 

The store also highlights a delicatessen counter with fine 

cheeses, meats and antipasti, a rotisserie, ‘Good‐to‐Go’ 

hot food, and freshly prepared curry from the world 

famous Bombay Brasserie. 

Andy and Hitesh have more than 30 years of retail 

experience behind them. ‘Providing a high level of 

service and a range that matches the demands of our 

customers is all about realising our ambition to create 

one of the very best convenience stores in the country,’ 

says Andy. 

Virginia Quay is the first Budgens store to have a smoothie 

and juice bar, where health conscious customers can pick up 

a freshly pressed Detox Special as well as fresh coffee to take 

away, along with pastries and freshly filled baguettes from the 

in‐store bakery 

In addition to the classic Budgens offering of fresh fruit, 

meat and poultry, plus groceries, chilled and frozen food 

and own label products, much thought and planning 

has gone into tailoring ranges and services to appeal to 

The Patels believe in becoming involved in community 

concerns, like supporting Richard House children’s 

hospice, which provides respite and end-of-life care and 

support to life-limited children and their families. On the 

store’s opening day, representatives from Richard House 

came along to conduct the official opening as Andy and 

Hitesh handed over a cheque for £500. 

They also have a collection scheme 

in-store and treats and goodies 

are provided for Richard House 

events such as birthday parties and 

Christmas carol concerts. ‡ 

28 

Local food for local stores 

– Essential Dressing 

Anne and Kevin Capper used to own a 

restaurant and had such a huge demand 

for their salad dressings and sauces 

they decided to bottle the magic and 

turn it into a full time business. The 

Essential Dressing range now comprises 

delicious drizzles, sauces, dips, coulis and 

fudge sauces to die for, and stunningly 

presented. The range is made entirely with natural products 

– and wherever possible, locally sourced and produced. The 

range can be found in Budgens stores in South-West England. 

Budgens and Newitt & Sons – 

a winning combination 

Our relationship with award‐winning 

family butcher and deli, M Newitt & Sons, 

of Thame, Oxfordshire, continues to 

flourish. There are now premium quality Newitt deli offerings 

including pies, quiches, sausages, ham and bacon plus value 

added products and ready to cook dishes in more than 40 

stores and to date 600 staff have been trained to service the 

range. In addition, pre-packed pies and quiches are available 

from the chilled shelves in more than 100 stores around the 

country via Budgens’ central distribution network and seasonal 

products such as hampers are also in the pipeline. 


Budgens Virginia Quay 

Providing a high level of 

service and a range that matches 

the demands of our customers 

is all about realising our ambition 

to create one of the very best 

convenience stores 

in the country 

29 


Londis Chesterfield 

We give everyone a smile and a meet and 

a greet and that’s what people are looking 

for round here. You just don’t get that 

from the multiples 

30 



Londis – best value locally 

Terry Caton is a Londis retailer who in March 2006 

took over a local post office and convenience store in 

Chesterfield when the existing owners wanted out. ‘I’m a 

local lad who’s aware of the importance of a business like 

this to the community,’ he says. 

The strength of local feeling over the post office was 

reflected in the flurry of campaigns and petitions against 

its closure. And this time the neighbourhood got its 

way and under Terry’s stewardship within ten months 

the store’s turnover was up by 90 per cent. ‘It’s about 

listening and responding to the needs of customers,’ 

Terry explains. 

Terry owns two other Londis stores in Chesterfield – a 

small news extra business with a thriving home delivery 

service and an 1,800 sq ft convenience store in the heart 

of the town’s Grangewood community. There’s strong 

competition from all the major multiples, but Terry 

believes he’s come up with a simple, winning formula. 

‘We’ve run the Grangewood store for ten years now and in 

that time more than doubled our business,’ he says. ‘The 

focus has always been on a strong range and targeted 

offers, excellent standards and customer service, plus 

intelligent value-adds like our 

PayZone service, that means 

people can top up their gas, 

electricity and mobiles.’ 

Terry is totally committed to his community. For 

example, he helped organise other Londis retailers in the 

area in sponsoring his local radio station Peak FM with its 

cheeky nude calendar to raise money for cancer charities. 

He also drummed up funds for a production at the local 

theatre in aid of two hospices. 

Terry believes that small businesses can survive and 

prosper if they recognise the need to earn the loyalty of 

the neighbourhoods in which they operate. Providing 

newspapers for the local drop-in centre and food baskets 

for the homeless are some of the ways Caton’s stores 

give something back to the community. 

‘I genuinely believe we have something unique to offer 

this town,’ says Terry. ‘We employ local people who 

customers know and are comfortable around. Some 

elderly people are uncomfortable in large supermarkets. 

We give everyone a smile and a meet and a greet and 

that’s what people are looking for round here. You just 

don’t get that from the multiples.’ 


– Kit’s Kitchen 

Headed by Tim Caldicott, Kit’s Kitchen has 

been supplying farm shops primarily with 

produce grown on the family farm in Egdon, 

Worcestershire since 2000. More recently, Tim 

and his team have expanded their business and 

developed a production kitchen and now supply 

Budgens stores in the Heart of England catchment area. 

Kit’s Kitchen fare includes award‐winning chutneys, pickles, 

BBQ sauces, salad dressings and pickled shallots (watch out for 

their kick), all of which are made using unique, tried and tested 

family recipes. The oldest of these is the Apple and Onion 

Chutney which was brought over by Tim’s great grandparents 

from India. 

In 2006 the range was selected for the launch of the Warner 

Budgens store in Broadway and the business continues to 

supply local stores in the area. 


– Mash Direct 

Having grown vegetables and potatoes on 

their farm in Comber, Co. Down for almost 

20 years, Martin and Tracy Hamilton (right) 

decided to supply ultra‐fresh, chilled, 

convenient vegetable products to meet consumer demand. 

The vegetables come into their state-of-the-art factory, fresh 

off the farm in the morning, where they are washed, peeled, 

steam-cooked, mashed gently, chilled rapidly and packaged 

– all in the space of a few hours. All Mash Direct products are 

free from additives and preservatives. 

‘There’s no secret to avoiding preservatives,’ says Martin. 

‘The key is the freshness. Our products have a good shelf 

life because potatoes that are in the field in the morning 

can be cooked, mashed and delivered by the afternoon.’ The 

Hamiltons also make sure that all their additional ingredients, 

such as butter and cream, are sourced from local farmers. 

31 


Different & better – consumers & communities 

We have built a network of 

progressive entrepreneurs 

working at the heart 

of communities with 

unparalleled knowledge 

of local needs and 

regional trends. This is an 

approach that promotes a 

people‐oriented culture, 

within which our retailers 

can grow their businesses. 

It’s also a model that recognises the value of 

vibrant, sustainable communities, and it enables us 

to respond to local demands with timely, focused 

and appropriate products, innovative services and 

neighbourhood initiatives. 

Working with progressive entrepreneurs, we 

continue to develop and improve our business by 

playing to our strengths as the company committed 

to offering the advantages of large scale shopping 

in a local context. 

phoNeS FoR NuRSeS 

Throughout 2006, Centra retailers worked with 

Ireland’s Jack & Jill Foundation to encourage 

customers to recycle their mobile phones and, in the 

process, support sick children. 

phones in working order 

are refurbished and 

exported to developing 

countries, while broken 

phones are dismantled, 

allowing some parts to 

be re-used. The toxic 

elements are removed 

and disposed of safely, 

so they are kept out of 

landfill. 

The Foundation provides 

early intervention, home-respite care and support to 

families with children up to the age of four. Many of 

these children have severe developmental problems 

and require extended care. 

Since its inception the Jack & Jill Foundation has 

helped more than 700 children and their families in 

Ireland, and by recycling 50,000 handsets the charity 

will be able to employ two full-time nurses for a year. 

1 ChaMpIoNING ChoICe 

A great grocery store is often the heart of a community 

and access to vibrant local stores is particularly important 

to time‐strapped consumers and shoppers without cars. 

By supporting independent retailers in all our markets we 

help family‐run, town‐centre retail outlets thrive. 

32 

ways Musgrave delivers 

value to consumers 

& communities 



In the heart of local communities 

Mark Richardson, Budgens, Newent 

Mark Richardson believes in local values and is 

committed to the view that a great local store must be 

an integral part of the community it serves. This is why 

he supports, sponsors and works with local schools and 

youth groups, running competitions and activities and 

organising store visits. 

‘Putting the store at the heart of the community also 

means supporting 

suppliers in the area,’ 

explains Mark. 

Mark regularly has local product 

‘We currently sell products from 22 local suppliers, 14 of 

which are local farmers.’ He regularly has local product 

samplings at the store and invites his suppliers to come 

and introduce their wares to the community. 

samplings at the store and invites 

his suppliers to come and introduce 

their wares to the community. 

In addition to his role as one of five local retailers on 

the committee for the Chamber of Commerce, Mark is 

one of two retailers chosen by the council to sit on the 

regeneration committee to act as a spokesperson for 

other retailers in the village. 

Mark undertakes a great deal of sponsorship within 

his local community. For example, his store is the only 

retail sponsor of the Newent Onion Fair, the village’s 

biggest yearly event, attracting 12,000 visitors from 

surrounding areas. He also supports Newent Dial-a- 

Ride and the Newent 

Shuttle – both providing 

transport services for the 

elderly from within and 

just outside the village. 

‘We also try to do what 

we can for the youth 

in the area,’ he says. 

‘We’ve supported the 

local youth ‘Chillout Zone’, which introduces kids to 

activities like computing and sports – and the store 

also sponsors the shirts of the Newent Comprehensive 

football team.’ ‡ 

3 meeting local needs 

Because our independent retailers tend to live and work 

in the communities they serve, they can be especially 

responsive to local needs – from establishing opening 

hours to suit customers’ lifestyles or sponsoring local 

sports teams, to driving major national initiatives like 

Kids in Action in Ireland and Action Cancer in Northern 

Ireland at a community level. 

2 great fresh food 

Bringing high-quality fresh foods to local communities 

is what our business is all about. To get fresh products 

to consumers even faster we’ve invested heavily in 

some of the world’s most advanced fresh food storage 

and logistics systems. 

33 


4 

BeTTeR RaNGe 

Convenience stores run by multiples 

are usually cut‐down versions of out‐of‐town 

superstores – one looks much like another. We work with 

independent retailers to deliver diversity in both convenience 

stores and supermarkets. Our retailers bring flare and innovation to 

local shopping, offering a greater range of products than major multiples’ 

convenience stores and matching product lines to local needs. 

34 

5 SuSTaINaBLe ShoppING 

With emissions and pollution from 

traffic rising dramatically, the local 

option we promote in all our markets 

is a more environmentally friendly 

alternative to superstore shopping. 

Local stores are also the lifeblood of 

communities – our retailers help them 

flourish. 



uNDeR The BoNNeT 

According to medical 

experts, Irish men are 

generally very bad at 

looking after their own 

health. This is why 

SuperValu took the 

lead in supporting the 

Department of Health 

and Irish Cancer Society 

in raising awareness of 

the dangers of prostate 

cancer. 

With more than 2000 cases of the most common male 

cancer reported in the Republic of Ireland every year, 

SuperValu and its retailers are 

committed to highlighting the 

steps men can take to reduce 

risk and draw attention to the 

symptoms that may indicate 

problems. 

Throughout the year, 

eye-catching posters and 

the Department of Health’s 

no-nonsense What goes on 

under a man’s bonnet guide 

were displayed and distributed 

in SuperValu stores. 

SupeRVaLu TIDy ToWNS 

Close to 700 entries were received for the 2006 Tidy 

Towns competition, which is run by the Department of 

the environment in association with SuperValu. 

For the second time in the history of the competition, 

Westport, Co. Mayo, scooped the award for Ireland’s 

Tidiest Town for 2006. Other winners included Birdhill, 

Co. Tipperary – Ireland’s Tidiest Village, Aughrim, Co. 

Wicklow – Ireland’s Tidiest Small Town and ennis, Co. 

Clare – Ireland’s Tidiest Large Urban Centre, a new 

category introduced for towns with a population of more 

than 15,000. Westport also received the award of Ireland’s 

Tidiest Large Town. 

The number of participants in the Tidy Towns 

competition, which has run 

since 1958, has increased 

substantially in recent 

years. Growing interest in 

Tidy Towns, as indicated 

by the high number of 

entries, reflects growing 

awareness by communities 

of the role they can play 

in improving their own 

towns and villages, and 

the key economic role 

SuperValu Westport: winner that tourism now plays in 

of Ireland’s Tidiest Town 2006 Ireland. ‡ 

6 LoCaL pRoDuCe 

We’re committed to providing consumers with the local, fresh, 

quality produce they demand. In the Republic of Ireland, 75 per 

cent of the produce we sell in our stores is either produced or 

manufactured in Ireland. Our strategy is to replicate this model 

wherever possible in all the markets in which we operate. 

7 LoCaL eMpLoyMeNT 

We bring employment to local communities. 

More often than not, our independent retailers 

recruit directly from the communities they serve. 

With our retailers we have more than 44,000 

employees and in the Republic of Ireland we are 

the country’s second largest employer. 

35 


8 

36 

passionate retailing 

Our independent retailer partners are utterly 

committed to their businesses. Because they 

own and operate their own stores, our retailers 

care about and invest heavily in every aspect 

of their businesses – from fresh food 

displays to on-shelf availability, hygiene 

to exceptionally high levels of service. 



In the heart of local communities 

Paul & Michelle Gravelle, Sawbridgeworth 

‘People around here aren’t shy about coming forward,’ 

says Paul Gravelle of Budgens in Sawbridgeworth. 

‘They’ve made it clear that a strong range 

of local products is important to them. 

And we’re more than happy to oblige.’ 

Taking an active role in the Town Partnership, the 

Gravelles support local charities like the Hailey 

Day Centre, a drop-in centre for the elderly, and 

Sawbridgeworth Young People’s Recreational Centre. 

As well as holding fundraising events throughout the 

year, Paul and Michelle allow staff the chance to work in 

the Hailey Day Centre once a month. 

Some of the brilliant local products Paul 

and his wife Michelle have introduced 

into the store include Broadoak sausages 

and ham, Stoke Farm apple juices, 

Saffron Brewery, goats’ milk products, Procter’s sausages 

and local eggs. They’ve also introduced organic and 

gluten-free products and extended other ranges too, 

offering their customers a distinctive selection. 

Like many of the new breed of Budgens neighbourhood 

retailers, Paul and Michelle regularly invite their local 

suppliers to the store to conduct sampling sessions for 

customers. ‘It’s a great way of keeping customers up to 

speed on new lines,’ says Michelle. ‘But it’s also a good 

excuse for people to come together for a natter.’ 

Paul and Michelle are also part of the Sawbridgeworth 

Town Partnership which co-ordinates efforts to improve 

the town. 

Paul and Michelle are passionate about their business 

and its role as the main grocery store in the village. 

School Health Initiative 

Working with Action Cancer, Centra retailers in Northern 

Ireland raise funds and promote a Health Action 

programme that has resulted in more than 40,000 

children receiving healthy 

lifestyle messaging and 

incentives since the 

scheme was launched in 

2003. 

The Health Action initiative 

is one of a number 

of Centra community 

outreach programmes 

targeting young people. 

For example, in 2006 

Centra retailers in Northern 

Ireland clubbed together 

to promote and sponsor 

the Cycling Proficiency 

Scheme in the region. 

This year Centra Finaghy’s 

Maurice McGivern 

joined Action Cancer’s 

Suzanne Patrick to celebrate 

Cranmore Integrated 

Primary School’s success 

in the 2006 Health Action 

Awards 

10 value for consumers 

Our scale enables us to bring value as well as quality to the 

independent retail sector. Because we serve around 3,000 outlets, local 

independent retailers are able to hold their own in competitive markets. 

Every week we compare and pricecheck key weekly shopping items 

against the largest multiples. 

9 innovation & partnership 

We are determined to improve the local shopping 

experience through innovation and partnership. 

Our SuperValu retailers employ real butchers 

and real bakers, while in Great Britain 15 Budgens 

stores now include Newitt’s deli counters, offering 

the same top quality products available at the 

Newitt family’s award-winning store in Thame. 

37 


Responsibility 

Sustainability 

How we work 

Climate change, energy security and energy 

management are crucial sustainability issues for 

businesses and critical for us all as human beings. This 

is why showing concern for the environment is no longer 

sufficient in itself – collective action is now imperative at 

all levels of society. 

We are committed to playing a leadership role in tackling 

sustainability challenges by managing and minimising 

any negative impacts of our business. 

Of course sustainability is not just about the environment; 

it is how our company lives, works and conducts business 

in the community and is central to how we do business. 

For example, our retailer partners operate in the heart 

of local communities, reducing the need for the long 

journeys and therefore the emissions associated with 

out of town shopping. Wherever possible, we work with 

local suppliers – which means we tend to buy British in 

Great Britain, Irish in Ireland and use Spanish suppliers 

in Spain. 

This all adds up to more convenience and better products, 

as well as a significantly reduced carbon footprint. 

38 

We believe sustainability should not be reduced to a 

shopping list of gestures, but must be integral to how 

companies do business, as well as being measurable 

and transparent. This is why we were the first company in 

the world to report its sustainability performance using 

the second Global Reporting Initiative’s guidelines, and 

we would like to think that we remain progressive, on a 

global level, in this way. 

We were also the first Irish company 

to join the United Nations Global 

Compact Network, through which 

we commit to upholding its ten 

principles within the areas of human 

rights, labour, the environment and 

anti‐corruption. 

How we make a difference 

Our business continues to grow significantly in 

scale and complexity, and also in terms of its 

geographical spread. As a result, managing our 

sustainability performance in areas such as waste 

management, energy efficiency and ethical trade 

has become increasingly challenging, which is why 

we are approaching these issues in a systematic and 

thorough way. 

During 2005, we decided it was time to review our 

Environmental Policy Charter, which was originally 

published in 2000. The result is a more broadlybased 

Environmental and Social Accountability Policy 

which represents a new milestone in our programme 


to meet international 

best practice in 

the management 

of sustainability 

impacts. This 

said, we maintain 

focus on the key 

issues for our 

sector, which 

include waste 

minimisation, 

energy efficiency, emissions 

reduction, natural resource conservation, climate 

change and the promotion of ethical trade. 

MINIMISING WaSTe 

This is an area in which we feel we’re starting to make a 

real difference. In the Republic of Ireland, for example, 

we achieved our 60 per cent waste recycling target 

in 2004 in our own and our retail partners’ 

facilities. We also met our 62 per cent target 

for 2005 and this year exceeded our target to 

achieve 65 per cent recycling in 2006. 

Central to the success of our waste management 

programme has been our unique one-stop-shop 

waste contracts, which enable us to manage 

the full range of store and facility wastes using 

approved contractors. Another innovation has 

been the minimisation of waste at source through, 

for example, projects aimed at reducing the amount of 

packaging on the products we sell. ‡ 

39 



40 

In Great Britain we are supporting the Waste & Resources 

Action Programme (WRAP), which aims to promote 

sustainable waste management practices by increasing 

resource efficiency and reducing carbon emissions. 

Through our partnership with WRAP, we have signed 

up to the Courtauld commitment which focuses on 

the development of new packaging solutions and 

technologies, so that less packaging waste ends up in the 

household bin. 

Energy consumption 

Energy consumption, particularly electricity use, presents 

us with another significant challenge in terms of lowering 

emissions of CO 2 

and other greenhouse gases. 

At a time of rapidly rising energy 

costs, coupled with concern 

regarding global supply, our focus 

on energy use also makes sound 

economic and business sense. 

During 2004 and 2005, we completed an energy 

audit of all of our facilities in the Republic of Ireland 

and Northern Ireland, and as a result have introduced 

a co‐ordinated energy monitoring and targeting 

programme designed to improve energy efficiency and 

lower consumption. We have also initiated numerous 

capital projects to update older equipment with modern 

energy efficient alternatives and we have sought to 

increase the use of renewable energy systems. A good 

example of this in action is the approach we’ve taken 

to the design and build of our new head office in Cork, 

which won Sustainable Energy Ireland’s Renewable Energy 

Project award in 2006 (see box right). This will save 

more than 250 tonnes of CO 2 

annually from this one 

building alone, whilst our recent Green Electricity deal 

with Energia will effectively mean that all of our Republic 

of Ireland warehouse and office facilities will be carbon 

neutral from the beginning of 2007, saving more than 

13,500 tonnes of carbon dioxide. 

We are currently auditing energy use in our premises 

in Great Britain and Spain with a view to extending best 

practice in these markets. 

‡ 

2006 Sustainable Energy Award 

In 2006, we won Sustainable Energy Ireland’s 

Renewable Energy Project award for ‘demonstrating 

that, with proper enlightened planning, it is possible 

to develop more sustainable buildings incorporating 

renewable energy systems’. 

At an early stage we decided that our new head office 

in Cork should be as sustainable as practicable, 

and incorporate both passive energy conservation 

measures and energy efficiency technology to 

minimise energy demand and greenhouse gas 

emissions. Key features of the final design include: 

n alignment of the building to reduce the impact of 

the prevailing South-Westerly wind; 

n increased insulation thicknesses and high 

specification double glazing to reduce solar gain 

in summer and heat losses in winter; 

n internal layout of the building and the use of a 

central atrium to maximise the use of ambient 

daylight in offices and public spaces; 

n a geothermal heating, ventilation and 

air‐conditioning system, which accesses 

renewable solar energy contained in ground 

water; 

n a solar/thermal water heating system, 

incorporating roof-mounted panels to provide all 

of the building’s hot water needs; 

n a smart lighting system incorporating occupancy 

and light level sensors; 

n a building energy management system to 

optimise all energy usage and operational 

performance. 

Early indications are that the building is performing 

well ahead of expectations and consuming 

approximately 50 per cent of its predicted energy 

demand and a quarter of the energy that a 

comparable building of its size would use. 


Musgrave Group head office, Cork 

41 



Emissions reduction 

We continue to focus on reducing the distances travelled 

by our truck fleets through logistics planning, while at 

the same time, delivering greater vehicle fuel efficiency 

through the use of new technology, driver training and 

incentives. Our use of ‘backhaul’ enables us to transport 

goods from suppliers’ warehouses to our own facilities, 

significantly reducing distances travelled by vehicles 

with empty trailers and allowing us to maximise fleet 

utilisation, with a consequent reduction in CO 2 

emissions. 

The recent integration of our logistics network in the 

Republic of Ireland following the opening of our Kilcock 

facility means that we have now assimilated the supply 

distances previously undertaken 

by our suppliers. We believe 

that our expertise in logistics 

planning will significantly 

reduce these previously 

unaccounted distances and 

provide us with an opportunity 

to reduce the emissions 

associated with our business 

further still. 

In Great Britain, similar 

initiatives are underway, while 

we also recently began trials of 

bio-diesel in vehicles operating 

from our Thamesmead 

distribution centre near London. 

Ethical trading 

Our Ethical Trading Policy has been developed in line 

with the principles of the United Nations Global Compact 

(UNGC), to which we are signatories. While recognising 

that governments have the main responsibility for 

implementing universal values, a novel feature of the 

Compact is that corporations are asked to embrace these 

values directly, in their own operations. Specifically, 

they are asked to incorporate them into their mission 

statements and to translate them into concrete corporate 

management practices. 

The Compact encourages businesses to foster human 

rights by supporting and respecting the protection of 

international human rights within 

their sphere of influence and 

by making sure that their own 

corporations are not complicit in 

human rights abuses. 

Our Ethical Trading Policy is 

now being communicated and 

implemented by our trading teams, 

which are in turn making our 

suppliers aware of our requirements. 

Musgrave communicates progress in 

implementing the UNGC principles 

via its Sustainability Reports and 

in this regard our 2006 report has 

been recognised as ‘notable’ at the 

UNGC. 

42 

Our people 

We recognise that, to attract and retain an educated, 

flexible and committed workforce, we must provide 

people with sustainable, stable, rewarding jobs, 

to enable them to achieve their full potential and 

enhance their quality of life. In 2006, we became the 

first retail organisation to receive Ireland’s Excellence 

through People Gold award. We’ll be rolling out the 

programme across the Group in 2007. Commitment to 

our people means: 

n supporting job satisfaction and creation through 

the maintenance and review of our employment 

policies and by conducting and taking account of 

regular employee surveys and consultations; 

n supporting training, 

awareness and 

empowerment through the 

maintenance and review of 

an extensive programme 

of training policies; 

n providing a safe and 

healthy working 

environment for all employees by promoting 

health, safety and welfare policies at all our 

facilities, collating performance statistics to 

international standards and reporting on that 

performance on a regular basis. 



charitable support 

Action Cancer’s Big Bus 

Gloria Hunniford was on hand in Northern Ireland to 

support Action Cancer and SuperValu in the launch of 

the charity’s Big Bus mobile unit, the first of its kind in 

Europe. SuperValu retailers have been working for over 

primary school children, and their parents, to become 

more focused on the importance of taking a holistic 

approach by combining healthy eating and an active 

lifestyle to improve their health. 

We recognise the importance of sustaining and building 

on what was achieved in 2006 and facilitating schools 

with a programme that benefits young people and this is 

a major, long‐term commitment by SuperValu. 

Triathlon 2006 

Now in its fifth year, Musgrave’s annual triathlon has 

raised more than €2 million for Our Lady’s Hospital for 

Sick Children in Crumlin, Dublin and the Irish Cancer 

Society. 

two years to raise more than £600,000 towards the cost 

of the ground-breaking unit, as part of their long-term 

commitment to Action Cancer’s mobile services. The 

Big Bus houses cancer prevention, early detection and 

support services and will visit over 200 workplaces and 

community groups in 2007, including SuperValu stores. 

Kids in Action 

SuperValu’s Kids in Action programme is a multi‐layered 

programme that encourages an active lifestyle and 

healthy eating habits among young children. 

The triathlon followed the traditional pattern of 

swimming, cycling and running, with the competitors 

being given the option of doing it solo or entering a three 

person team, with each 

member taking part in 

one specified area. 

Store owners and staff 

from SuperValu and 

Centra stores throughout 

the country joined in with 

other competitors who 

completed the gruelling 

course, demonstrating 

the support and 

commitment of both the 

company and its employees for this event. 

Following the launch of the programme in 2006, 

SuperValu retailers have 

provided in excess of 

€1.3 million worth of 

sports equipment and 

have delivered more than 

50 tonnes of free fresh 

fruit to primary schools all 

over Ireland. 

Funds raised from the triathlon have gone towards vital 

areas, such as a new 

haematology oncology 

and bone marrow 

transplant centre and a 

night nurse programme 

for cancer sufferers. 

Kids in Action was 

specifically designed as a 

multi-layered programme 

in order to encourage Irish 

Raising awareness: 

Pupils at Scoil an 

cloiginn Cleggan learn 

fruitful lessons 

43 


Summary directors’ report 

Summary Financial Statements and Report 

of the Auditors 

The directors have pleasure in presenting the summary 

Group financial statements of Musgrave Group Plc 

for the year ended 31 December 2006, representing a 

summary of the information presented to shareholders 

in the full consolidated financial statements which are to 

be annexed to the company’s annual return. 

The auditors, PricewaterhouseCoopers, have issued 

an unqualified audit report under Section 193 of the 

Companies Act 1990, in respect of the Group financial 

statements of Musgrave Group Plc for the year ended 

31 December 2006. 

44 

Principal Activities and Review of the 

Business 

The principal activity of the Group remains the wholesale 

and retail distribution of food and general merchandise. 

A review of the business, for the year ended 31 December 

2006 of recent events and of likely future developments, 

is included in the Chairman’s statement on page 7, the 

Group CEO’s interview on pages 8 to 13 and the Review 

of 2006 on pages 14 to 21. 

Profits, Dividends and Reserves 

Profit after tax for the financial year amounted to 

€60.7 million. Aggregate interim dividends of 19.8 cent 

(2005: 18.9 cent) per share amounting to €11.8 million 

(2005: €11.2 million) were paid during the year. The 

directors propose a final dividend of 6.6 cent (2005: 

6.3 cent) amounting to €3.9 million (2005: €3.7 million). 

The proposed dividend will be submitted for approval at 

the 2007 Annual General Meeting. 

Events since the year-end 

There have been no significant events affecting the 

Group since the year-end. 

Directors 

The names of the persons who are currently or were 

directors for the entire year ended 31 December 2006 

are as follows: 

Left to right: Donal Horgan, Martin Hyson, 

Frank Coghlan, Padraic Liston, Ken Byrne, Tim Kenny, 

Philip Mackeown, Noel Keeley, Chris Martin, 

Hugh Mackeown, Stuart Musgrave, Peter Musgrave, 

Seamus Scally, Peter Lacy 

H N Mackeown 

P J Musgrave 

C N Martin 

K Byrne 

F P Coghlan 

D Horgan 

M J Hyson 

N Keeley 

T Kenny 

P Lacy (appointed 

20 September 2006) 

P Liston 

P Mackeown (appointed 

7 December 2006) 

S Musgrave 

S Scally 

M Taylor (resigned 

10 November 2006) 

Directors’ Responsibilities 

The directors are responsible for the presentation 

of financial statements for each accounting period 

which comply with the provisions of company law and 

professional guidelines for good practice, applying 

certain estimates and informed judgements that are 

reasonable and prudent. The Group maintains systems 

of internal control which have been designed to give 

reasonable assurance that transactions are executed in 


accordance with management’s authorisation, that assets 

are safeguarded, that fraud is prevented and that proper 

financial records are maintained. 

Political Donations 

The Electoral Act 1997 requires companies to disclose all 

political donations to any individual party of more than 

€5,079 in value made during the year. The directors have 

satisfied themselves that no such donations in excess of 

this amount have been made. 

On behalf of the Board 

Chris Martin 

Group Chief Executive Officer 

Secretary and 

Registered Office 

Tim Kenny 

Ballycurreen 

Airport Road 

Cork, Ireland 

(Registered number: 

105820) 

Auditors 

PricewaterhouseCoopers 

Chartered Accountants 

and Registered Auditors 

One Spencer Dock, 

North Wall Quay, Dublin 1 

Bankers 

AIB Bank 

Bank of Ireland 

Barclays Bank 

BNP Paribas 

IIB Bank 

National Irish Bank 

Rabobank 

Ulster Bank 

Solicitors 

Arthur Cox 

Earlsfort Centre 

Earlsfort Terrace 

Dublin 2, Ireland 

Tim Kenny 

Group Finance Director 

45 


Our board of directors 

hugh N Mackeown 

Chairman 

Chris Martin 

Group Chief executive Officer 

Donal horgan Managing Director, 

SuperValu, Centra, Ireland 

Martin hyson Managing Director, 

Budgens, Londis, Great Britain 

Frank Coghlan Managing Director, 

Musgrave Wholesale Ireland 

46 

Tim kenny 


Noel keeley 

Group HR Director 

ken Byrne 

Group IT Director 


Our board of directors 

peter Musgrave 

Vice Chairman 

Seamus Scally 

Non-executive Director 

Stuart Musgrave 


padraic Liston 

Group Commercial Director 

philip Mackeown 


peter Lacy 


47 


Side running head 

48 


Results 

Turnover amounted to €4,593.5 million, an increase 

of 4.5 per cent on 2005. Profit before tax increased by 

14.2 per cent to €81.0 million and profit after tax was 

11.8 per cent higher at €60.7 million. Compound annual 

growth in turnover and profit before tax has been 15.2 per 

cent and 11.7 per cent respectively over the past five years 

as set out in table 1 below. 

Accounting policies and standards 

The financial statements reflect the adoption of Financial 

Reporting Standard 20 ‘Share-Based Payment’ (FRS 20) 

and UITF Abstract 38 ‘Accounting for ESOP Trusts’ 

representing changes in accounting policy and the 

comparative figures for 2005 and prior years have been 

restated accordingly. 

The effect of the accounting policy change was to 

decrease profit by €1.7 million (2005: €1.6 million), and 

to increase shareholders’ funds by €2.1 million. 

in net debt during the year and consequent saving 

in interest cost which at €18.5 million is €7.3 million 

below last year. Net debt now stands at €186.3 million 

and represents 60.3 per cent of shareholders’ funds 

compared to 134.4 per cent in 2005. Net assets are 

€308.7 million, an increase of €66.4 million on last 

year, partly due to a €23.3 million reduction in the 

pension liability to €52.4 million. Net assets include 

€221.3 million (2005: €263.9 million) of goodwill, 

the majority of which relates to goodwill arising on the 

purchases of Budgens and Londis in Great Britain. 

The results include a provision for losses and losses 

arising on disposal of fixed assets of €5.4 million (2005: 

€4.3 million). This relates primarily to the Group’s 

strategy to dispose of its own stores in Great Britain to 

entrepreneurial food retailers. During 2006 59 own 

stores were sold with proceeds of €86.5 million. An 

impairment review was carried out on the remaining 

stores at year-end. 

Finance review 

Table 1 Compound annual growth rates 

3 Year % 5 Year % 

Turnover 11.2 15.2 

Profit before taxation 11.6 11.7 

Dividend per share 9.3 9.6 

Dividends 

Dividends increased to €15.5 million (2005: 

€14.7 million). The total dividend payment for the year 

is 26.1 cent per share compared to 24.9 cent last year, an 

increase of 5 per cent. 

Performance overview 

Profit before tax increased by 14.2 per cent to 

€81.0 million and profit after tax was 11.8 per cent higher 

at €60.7 million. The comparability of the Group’s results 

to the prior year is affected by the strategy to divest the 

own store network in Great Britain to entrepreneurial 

food retailers with a consequent transfer of sales, 

gross profit and certain operating costs. Significant 

progress was made on this programme during 2006 

with 59 own stores disposed of during the year. New 

retailers acquiring stores previously owned by the Group 

delivered an immediate uplift in retail sales, confirming 

the success of the Group’s strategy of partnering with 

entrepreneurial food retailers. On a wholesale basis sales 

during the year increased by 9.5 per cent. 

Cash generation 

The Group’s businesses have traditionally been 

strongly cash generative. In 2006, net debt reduced by 

€139.4 million to €186.3 million. Operating cashflow was 

€79.8 million and included a €19.9 million investment in 

working capital partly resulting from the growth in trade 

with entrepreneurial food retailers. Net capital proceeds 

of €60.6 million includes proceeds on store disposals 

in Great Britain of €86.5 million, other net proceeds of 

€18.7 million and capital expenditure of €44.6 million 

which includes the development of a major new IT 

system (‘MSR’) to be implemented in 2007. 

‡ 

The successful strategy of divesting stores to retailers 

along with the strong underlying Group business 

performance has resulted in a €139.4 million reduction 

49 



Table 2 Summary cash flow statement 


€m 

2005 

Restated 

€m 

Operating profit 104.9 101.0 

Depreciation and amortisation 55.8 60.4 

EBITDA* 160.7 161.4 

Interest (19.8) (22.3) 

Taxation (20.5) (16.0) 

Dividends (15.5) (14.7) 

Special pension contribution (5.2) (10.0) 

Working capital (19.9) (13.0) 

Operating cashflow 79.8 85.4 

Net capital proceeds/expenditure 60.6 (11.5) 

Payments to reacquire company shares (4.1) (3.3) 

Issue costs amortisation (2.7) (3.8) 

Issue costs paid 2.1 – 

Translation adjustment (2.5) (5.8) 

Purchase of subsidiary undertakings – (11.0) 

Debt obligations disposed of with 

subsidiary undertakings 

6.2 – 

Decrease in net debt 139.4 50.0 

* Earnings before interest, taxes, depreciation and amortisation 

Borrowings and interest cost 

The Group refinanced its borrowing facilities during 

the year and now has €600.0 million of unsecured 

committed medium-term bank debt facilities in place 

with a syndicate of banks. These consist of both revolving 

credit and term debt facilities. The Group’s core bank 

debt was €188.2 million at year-end (excluding issue 

costs of €1.9 million) resulting in a comfortable level 

of funds available (headroom) of €411.8 million. The 

Group’s net debt to equity ratio at 31 December 2006 was 

60.3 per cent (2005: 134.4 per cent). 

In 2006 net interest payable decreased by 28.3 per 

cent to €18.5 million. This reflects the strong cashflow 

generated during the year. Interest cover, an important 

measure of the Group’s capacity to service its debt 

obligations, continued to be comfortable at 8.7 times 

EBITDA (2005: 6.3 times). 

Pensions 

The Group’s pension liability in respect of its defined 

benefit schemes is €52.4 million (2005: €75.7 million). 

The decrease during the year of €23.3 million reflects 

a strong investment performance on pension scheme 

assets and an increase in the interest rate used to 

discount future scheme liabilities along with a special 

employer contribution to the ROI scheme of €5.2 million 

during 2006, in addition to a €10.0 million special 

contribution in 2005. The Group has adopted pension 

contribution rates designed to eliminate this deficit over 

the average remaining working lifetimes of employees. 

At 31 December 2006 the various defined benefit 

pension schemes had assets of €215.4 million. 

50 



Taxation 

The effective tax rate for the year ended 31 December 

2006 is 25.1 per cent compared to 23.4 per cent in the 

prior year. This increase relates to tax arising on the 

disposal of own stores in Great Britain which is incurred at 

a rate of 30 per cent. 

Financial risk management 

The Group’s operations expose it to a variety of financial 

risks that include foreign exchange risk, credit risk, 

liquidity and interest rate risk. The Group has in place a 

risk management programme that seeks to manage the 

financial exposures of the Group and a treasury policy 

that has been approved by the Board. The policies are 

implemented by the Group’s finance department and 

includes specific guidelines to manage interest rate 

risk, credit risk and the circumstances where it would be 

appropriate to use financial instruments to manage these 

risks. 

In order to ensure stability of interest outflows the Group 

has a policy of maintaining 50 per cent of its term debt 

at fixed interest rates for a one-year period. The Group 

actively maintains adequate medium-term committed 

facilities to ensure the Group has sufficient available 

funds for operations and planned expansion. 

The Group is exposed to foreign exchange risk in the 

normal course of business for purchases outside the 

euro-zone. The Group’s policy on mitigating the effect 

of this currency exposure is to hedge transactions by 

entering into forward foreign exchange contracts. The 

Group also has substantial net assets denominated in 

sterling and has a policy of maintaining balance sheet 

hedges, through sterling debt and cross-currency 

swaps, designed to hedge up to 50 per cent of this net 

investment. The exchange rate between the euro and 

sterling was relatively stable during the year and did not 

have a material impact on the Group’s results. 

The Group is highly focused on risk management. 

Accordingly insurance is held for all significant insurable 

risks and against major catastrophes. For any such events 

the Group generally bears an initial cost before external 

cover begins. 

Corporate governance 

The board of Musgrave Group plc is committed to a 

culture of effective corporate governance which the 

Board defines as the system by which the Musgrave 

Group through living its values is directed and managed. 

It influences how the objectives of the Group are set 

and achieved, how risk is monitored and assessed, 

and how performance is optimised. Good corporate 

governance structures encourage the Group to create 

value for stakeholders and provide accountability and 

control systems commensurate with the risks incurred. 

The Board and its executive, audit, remuneration and 

shareholder committees are committed to continuing 

to develop a culture of effective corporate governance 

across the Group. 

Summary 

The Group has performed well in 2006 delivering profit 

growth, continuing strong cash generation, further 

dividend growth and a stronger balance sheet and is well 

positioned to continue to grow its businesses. 

Tim Kenny 


Table 3 Key financial indicators 

2006 2005 

Restated 

2004 

Restated 

EBITDA: Interest Cover (times) 8.7 6.3 5.4 

Net Debt: Shareholders’ Funds (%) 60.3 134.4 174.2 

Return on Average Capital Employed (%)* 23.9 23.5 25.7 

* Excluding pension deficit 

51 


Summary financial statements 

CONSOLIDATED PROFIT & LOSS ACCOUNT 

Note 2006 2005 

€m €m 

Turnover 2 4,593.5 4,393.6 

Group Operating profit 3 104.9 101.0 

Provisions for losses and losses arising on disposal of fixed assets 4 (5.4) (4.3) 

Profit on ordinary activities before interest and taxation 99.5 96.7 

Net interest payable and income from financial assets (18.5) (25.8) 

Profit before taxation 81.0 70.9 

Taxation 5 (20.3) (16.6) 

Profit for the financial year 60.7 54.3 

Dividends 6 (15.5) (14.7) 

Profit retained in year 45.2 39.6 

On behalf of the board 

Chris Martin 


Tim Kenny 


52 



CONSOLIDATED BALANCE SHEET 


Restated 

€m €m 

Fixed assets 

Intangible assets – goodwill 7 221.3 263.9 

Tangible assets 8 270.7 327.8 

Financial assets 9 14.0 16.5 

506.0 608.2 

Current assets 

Stocks 147.5 156.0 

Trade debtors and prepayments 543.4 492.9 

Investments 7.2 16.2 

Cash at bank and in hand 159.3 137.5 

857.4 802.6 

Current liabilities – amounts falling due within one year 

Bank overdrafts and loans 10 (178.7) (208.5) 

Trade and other creditors (598.6) (587.1) 

Creditors for taxation and social welfare (29.9) (27.7) 

(807.2) (823.3) 

Net current assets/(liabilities) 50.2 (20.7) 

Total assets less current liabilities 556.2 587.5 

Bank loans – amounts falling due after more than one year (158.7) (241.4) 

Other creditors – amounts falling due after more than one year (1.0) (1.1) 

Provisions for liabilities and charges 11 (35.4) (27.0) 

Pension liability 18 (52.4) (75.7) 

308.7 242.3 

Capital and reserves 

Called up share capital 29.8 29.8 

Share premium account 14 2.7 2.7 

Capital redemption reserve 14 1.5 1.5 

Revaluation and other reserves 14 60.3 60.0 

Profit and loss account 14 214.4 148.3 

Equity shareholders’ funds 15 308.7 242.3 


Chris Martin 


Tim Kenny 


53 



CONSOLIDATED CASH FLOW STATEMENT 


Restated 

€m €m 

Net cash inflow from operating activities 16 135.6 137.6 

Returns on investments and servicing of finance 

Net interest paid and Income received from financial assets (19.8) (22.3) 

Taxation 

Corporation tax paid (20.5) (16.0) 

Capital expenditure 

Purchase of tangible assets (39.7) (40.2) 

Sale of tangible assets 96.3 23.4 

56.6 (16.8) 

Acquisitions and disposals 

Purchase of financial assets (4.9) (3.0) 

Sale of financial assets 8.9 8.3 

Purchase of subsidiary undertakings 16 – (11.0) 

4.0 (5.7) 

Equity dividends paid (15.5) (14.7) 

Net cash inflow before financing 140.4 62.1 

Financing 

Share capital issued – 0.8 

Payments to reacquire company shares 13 (4.1) (3.3) 

Bank loans repaid 16 (389.8) (88.6) 

Bank loans received 16 291.4 – 

Loan notes repaid 16 (1.9) (0.1) 

Other loans repaid 16 (0.6) – 

Other loans received 16 0.5 1.1 

Capital element of finance lease payments 16 (0.9) (0.9) 

Net cash outflow from financing (105.4) (91.0) 

Increase/(decrease) in cash 35.0 (28.9) 


Chris Martin 


54 

Tim Kenny 




Notes to Summary Financial Statements 

1 Basis of Consolidation 

The consolidated financial statements comprise the financial statements of the holding company and all its subsidiary undertakings. 

The annual financial statements of all Group undertakings are prepared to the Group’s financial year-end. The attributable results of 

acquisitions are included in the financial statements from the date of acquisition. The principal subsidiaries are listed in note 20. 

The financial statements have been prepared using the same accounting policies as set out in the financial statements for the year 

ended 31 December 2005 with the exception of the accounting policy change following the adoption of Financial Reporting Standard 

20 ‘Share-based payment’ (FRS 20) and the adoption of UITF Abstract 38 ‘Accounting for ESOP Trusts’ (UITF 38) in respect of the 

Group’s Approved Profit Share Scheme Trust. These changes represent changes in accounting policies and the comparative figures 

have been restated accordingly. 

The effect of the change in accounting policy on share-based payments was to decrease profit before tax by €1.7 million (2005: 

€1.6 million) comprising of an increase in share-based payments included in staff costs (note 3). 

The effect of the change in policy in respect of the Group’s Approved Profit Share Scheme Trust was to recognise the shares held 

by the trust as own shares and therefore to increase other reserves by €1.5 million at 31 December 2005 and profit and loss account 

reserves by €0.6 million. 

2 Turnover by Geographical Market 


€m €m 

Republic of Ireland 2,584.7 2,358.6 

United Kingdom 1828.3 1861.5 

Spain 180.5 173.5 

4,593.5 4,393.6 

55 



3 Operating Profit 


Restated 

€m €m 

Turnover 4,593.5 4,393.6 

Cost of sales (3,892.1) (3,700.3) 

Gross profit 701.4 693.3 

Selling and distribution costs (427.2) (426.8) 

Administrative and other operating expenses (net) (169.3) (165.5) 



Restated 

€m €m 

Operating profit has been arrived at after charging/(crediting): 

Staff costs 264.9 262.5 

Depreciation of tangible assets 33.5 38.7 

Operating lease rentals 26.7 36.0 

Amortisation of goodwill 21.8 22.4 

Auditors’ remuneration 1.0 0.9 

Provisions for impairment 0.5 (0.7) 

4 Provisions for losses and losses arising on disposal of fixed assets 


Restated 

€m €m 

Profits arising on disposal of fixed assets net of goodwill disposal 12.9 4.8 

Impairment in value of tangible and financial assets (11.0) (8.2) 

Provisions for onerous contracts (7.3) (0.9) 

(5.4) (4.3) 

The Group has a programme in place to sell its shop properties in Great Britain to entrepreneurial food retailers, based on a strategy 

of supporting a network of independently-owned stores in Great Britain, similar to its network in Ireland. 

The impairment in value of tangible fixed assets results from a review of the carrying value of the remaining shop properties in 

Great Britain based on the Group’s strategy. Similarly, the provision for onerous contracts relates to onerous lease, dilapidation and 

other lease provisions in respect of shop properties in Great Britain. The impairment in value of financial assets results from a review 

of the carrying value of shop investments in Northern Ireland and in the Republic of Ireland. 

56 



5 Taxation 


€m €m 

Corporation tax 26.9 19.8 

Adjustments in respect of prior years (4.7) (3.0) 

Current tax charge for the year 22.2 16.8 

Deferred tax – (reversal)/origination of timing differences 

– other (2.5) (1.1) 

– pension 0.6 0.9 

20.3 16.6 

6 Dividends 


Restated 

€m €m 

Dividends paid on shares: 

Ordinary dividends of 26.1c (2005: 24.9c) per share: 15.5 14.7 

The directors propose a final dividend for the year ended 31 December 2006 of 6.6 cent (2005: 6.3 cent) per share amounting to 

€3.9 million (2005: €3.7 million). The proposed dividend will be submitted for approval at the 2007 Annual General Meeting, and if 

approved will be reflected in the financial statements for the year end 31 December 2007. 

Aggregate interim dividends of 19.8 cent (2005: 18.9 cent) per €0.50 ordinary share amounting to €11.8 million (2005: €11.2 million) 

were paid during the year. Interim dividends were paid on a quarterly basis. The interim dividend paid of 19.8 cent (2005: 18.9 cent) 

together with the proposed final dividend of 6.6 cent (2005: 6.3 cent) results in a total dividend in respect of 2006 of 26.1 cent (2005: 

25.2 cent). 

7 Intangible assets – goodwill 


€m 

Net book amount at beginning of year 263.9 

Adjustments to provisional fair values (note 17) (0.4) 

Amortisation charge for year (21.8) 

Disposals in year (25.8) 

Translation and other adjustments 5.4 

Net book amount at end of year 221.3 

The adjustment to provisional fair values relates to a hindsight review of the fair value of the net assets acquired in 2005 on the 

acquisition of Variety Foods (NI) Limited. 

Goodwill is being amortised over periods ranging from 5 to 20 years, being the directors’ estimate of the period over which the values 

of the underlying businesses acquired are expected to exceed the value of underlying assets. 

The goodwill disposals relate to goodwill ascribed to shop properties disposed of during the year (note 4). 

57 



8 Tangible assets – movement summary 

Land and Shop Plant, Motor Total 

buildings Properties machinery and vehicles 

equipment 

€m €m €m €m €m 

Net book amount at beginning of year 144.4 104.7 69.1 9.6 327.8 

Additions in year 11.1 8.2 12.1 5.6 37.0 

Disposals in year (2.7) (48.7) (0.9) (0.2) (52.5) 

Depreciation and impairment charge (2.3) (24.2) (15.2) (1.9) (43.6) 

Translation and other adjustments 0.2 1.5 0.3 – 2.0 

Net book amount at end of year 150.7 41.5 65.4 13.1 270.7 

The estimated useful lives of tangible assets by reference to which depreciation is calculated are as follows: 

Buildings and shop properties 

Plant, machinery and equipment 

Motor vehicles 

25 to 50 years 

3 to 10 years 

4 to 5 years 

The net book value of land and buildings at 31 December 2006 of €150.7 million represents assets stated at valuation of 

€127.3 million, assets stated at cost of €28.8 million less accumulated depreciation of €5.4 million. 

9 Financial assets – movement summary 

U unlisted Shop Total 

securities 

investments 

€m €m €m 

Net book amount at beginning of year 3.7 12.8 16.5 

Additions in year – 5.0 5.0 

Disposals in year (3.7) (1.2) (4.9) 

Transfer to current investments – (1.5) (1.5) 

Provisions for impairment – (1.4) (1.4) 

Translation and other adjustments – 0.3 0.3 

Net book amount at end of year – 14.0 14.0 

Shop investments relate to retail properties purchased by the Group. They are acquired solely for the purpose of expanding the 

Group’s network of retail stores and it is intended that the properties will be sold to entrepreneurial food retailers. 

58 



10 Bank overdrafts and loans 


Restated 

€m €m 

Amounts falling due within one year 178.7 208.5 

Between one and two years 27.5 111.1 

Between two and five years 133.1 132.8 

Unamortised issue costs (1.9) (2.5) 

Total bank overdrafts and loans 337.4 449.9 

The bank facilities were refinanced on 9 June 2006. This involved the repayment of €289.3 million of existing loans and the draw 

down of €291.4 million of new loans. The total available facilities were increased from €409.3 million to €600.0 million. These 

facilities are repayable by June 2011. 

Bank security 

Bank facilities of €339.3 million (2005: €448.4 million) are secured by cross guarantees from the company and certain of its 

operating subsidiary undertakings. 

11 Provision for liabilities and charges 

Deferred tax Other Total 

€m €m €m 

At beginning of year 10.6 16.4 27.0 

(Credited)/charged to profit and loss account (2.5) 14.8 12.3 

Adjustments to provisional fair values (note 17) (0.4) – (0.4) 

Utilised during the year – (3.8) (3.8) 

Translation adjustment 0.1 0.2 0.3 

At end of year 7.8 27.6 35.4 

The deferred tax provision relates to timing differences on capital allowances of €4.5 million (2005: €8.7 million) and other timing 

differences of €3.3 million (2005: €1.9 million). 

The other provisions relate to self-insurance (€6.1 million) and estimated liabilities in respect of leasehold properties for onerous 

leases, dilapidations and other obligations (€21.5 million). 

12 share capital 

Ordinary shares of €0.50 each 


€m €m 

Authorised 50.0 50.0 

Issued and fully paid 29.8 29.8 

59 



13 Own Shares 


Restated 

€m €m 

Own Shares 2.8 2.4 

Own shares are held to satisfy awards under the Group’s Approved Profit Sharing Schemes and Long Term Incentive Plans and are 

held by the Profit Sharing Scheme Trust and Employee Benefit Trust. During the year €4.1 million (2005: €3.3 million) was incurred 

on acquiring shares, €3.7 million (2005: €3.2 million) of which were used for awards under the long-term incentive plans and 

Approved Profit Sharing Scheme. At 31 December 2006 the trustees held 553,963 shares (2005: 501,830 shares). 

14 Reserves 

Share Capital 

premium redemption Revaluation Other Profit & 

account reserve reserve reserves Loss 

€m €m €m €m €m 

At beginning of year – as previously stated 2.7 1.5 51.6 6.9 147.7 

Prior year adjustment: 

UITF 38 – Accounting for ESOP Trusts – – – 1.5 0.6 

At beginning of year – restated 2.7 1.5 51.6 8.4 148.3 

Total recognised gains for the year (note 15) – – – – 82.0 

Dividends paid (note 6) – – – – (15.5) 

Payments to reacquire ordinary shares – – – (3.7) (0.4) 

Awards under long term incentive plan – – – 2.3 – 

Awards under profit sharing schemes – – – 1.7 – 

At end of year 2.7 1.5 51.6 8.7 214.4 

60 



15 Reconciliation of Movements in Shareholders’ Funds 


Restated 

€m €m 

Profit for the financial year 60.7 54.3 

Actuarial gain/(loss) on pension schemes (note 19) 21.6 (17.3) 

Deferred tax on actuarial (gain)/loss on pension schemes (note 19) (4.2) 3.3 

Currency translation adjustment on net investment in foreign subsidiary undertakings 3.9 0.1 

Total recognised gains relating to the year 82.0 40.4 

Dividends paid (note 6) (15.5) (14.7) 

Shares issued in year – 0.8 

Own shares (note 13) (0.4) (0.1) 

Shares purchased for long term incentive plans and profit sharing schemes (note 13) (3.7) (3.2) 

Awards under long term incentive plans 2.3 1.8 

Awards under profit sharing schemes 1.7 1.6 

Net increase in shareholders’ funds 66.4 26.6 

Shareholders’ funds at beginning of year – as previously stated 240.2 274.6 

Prior year adjustments: 

FRS 20 Share-based payment and UTIF 38 Accounting for ESOP Trusts 2.1 0.1 

FRS 17 Retirement Benefits and FRS 21 Events after the balance sheet date (dividends) – (59.0) 

Shareholders’ funds at end of year 308.7 242.3 

61 



16 Notes on Consolidated Cash Flow Statement 


Restated 

€m €m 

Net cash inflow from operating activities 


Depreciation of tangible assets 33.5 38.7 

Amortisation of goodwill 21.8 22.4 

Provisions for impairment in respect of financial assets 0.5 (0.7) 

Provision for long term incentive plans 2.3 1.8 

Provision for profit sharing schemes 1.7 1.6 

Decrease/(increase) in stocks 10.2 (2.2) 

Increase in debtors (57.0) (16.7) 

Increase in creditors 13.2 7.8 

Increase/(decrease) in provisions and pension 6.0 (9.6) 

Currency translation adjustment (1.5) (6.5) 

135.6 137.6 

Purchase of subsidiary undertakings 

Purchase of subsidiary undertakings – 10.5 

Sale of subsidiary undertakings (3.1) – 

Net cash acquired with subsidiary undertakings – (0.8) 

Deferred consideration paid 3.1 1.3 

– 11.0 

Reconciliation of net cash flow to movement in net debt 

Increase/(decrease) in cash in year 35.0 (28.9) 

Cash flow from change in debt and finance leases 101.3 88.5 

Issue costs paid 2.1 – 

Decrease in net debt resulting from cash flows 138.4 59.6 

Debt and other loans disposed of during the year 6.2 – 

Amortisation of issue costs (2.7) (4.0) 

Currency translation adjustment (2.5) (5.6) 

Movement in net debt in the year 139.4 50.0 

Net debt at 1 January (325.7) (375.7) 

Net debt at 31 December (186.3) (325.7) 

62 



Analysis of net debt 

At 1 Cash Disposal Currency At 31 

January flow translation December 

2006 and other non- 2006 

Restated 

cash changes 

€m €m €m €m €m 

Cash at bank and in hand 137.5 19.7 – 2.1 159.3 

Bank overdrafts (114.4) 15.3 – (1.0) (100.1) 

Total cash 23.1 35.0 – 1.1 59.2 

Bank loans due within one year (94.1) 90.1 4.0 (78.6) (78.6) 

Bank loans due after one year (243.9) 8.3 – 75.0 (160.6) 

Issue costs 2.5 2.1 – (2.7) 1.9 

Total bank loans (335.5) 100.5 4.0 (6.3) (237.3) 

Other loans (9.8) 0.1 2.2 – (7.5) 

Loan notes (2.5) 1.9 – – (0.6) 

Finance lease obligations (1.0) 0.9 – – (0.1) 

Net debt (325.7) 138.4 6.2 (5.2) (186.3) 

17 Commitments and Contingencies 


€m €m 

Capital expenditure commitments 22.5 42.5 

Operating lease commitments (payable in next year) 41.1 38.9 

Other commitments and guarantees 55.9 30.5 

Deferred tax contingency on revaluation surplus 10.1 10.1 

63 



18 Pensions 

The pension entitlements of employees, including executive directors, arise under defined benefit and defined contribution schemes 

and are secured by contributions by the Group to separately administered pension funds in the Republic of Ireland, Northern 

Ireland and Great Britain. The pension charge for the year is €11.3 million (2005: €13.8 million) comprising a current service cost 

of €12.4 million (2005: €13.5 million), past service costs of €0.1 million (2005: €nil) in respect of defined benefit schemes and 

defined contribution schemes cost of €0.3 million (2005: €0.3 million) and is reduced by gains on curtailments and settlements of 

€1.5 million (2005: €nil). The net finance cost resulting from the scheme deficits is €2.0 million (2005: €2.4 million). 

The funding requirements in relation to the Group’s defined benefits schemes are assessed in accordance with the advice of 

independent qualified actuaries and valuations are prepared at triennial intervals. Annual contributions are based on the advice of 

professionally qualified actuaries using the aggregate funding and projected unit methods. The most recent actuarial valuations for 

the Group’s schemes were: Republic of Ireland – 29 March 2004; Northern Ireland – 5 April 2003; Budgens Great Britain – 31 March 

2003 and Londis Great Britain – 1 May 2005. The actuarial valuation reports are available for inspection by members of the schemes 

at the registered office of the company but are not available for public inspection. 

The latest agreed contribution rates for the Group’s material schemes are: Republic of Ireland – 24.4 per cent of pensionable salaries; 

Northern Ireland – 22.7 per cent of pensionable salaries and Budgens Great Britain – 15 per cent of members’ salaries. 

The Londis scheme has been closed to new members since August 1991. 

An updated actuarial valuation for the purposes of FRS 17 was carried out as at 31 December 2006 by a qualified independent actuary 

in respect of Group pension schemes. The main financial assumptions used in the valuation were: 


Rate of increase in wages and salaries 4.00% 4.00% 

Rate of increase in pensions in payment 3.00% 2.90% 

Discount rate used for scheme liabilities 4.90% 4.40% 

Inflation assumption 2.50% 2.50% 

The long term expected rate of return at the balance sheet dates were: 


Equities 6.70% 6.40% 

Property 4.00% 5.30% 

Bonds 5.70% 3.70% 

Others 4.30% 3.50% 

The following amounts at the balance sheet dates were measured in accordance with requirements of FRS 17: 


€m €m 

Total market value of assets 215.4 178.2 

Present value of schemes liabilities (279.2) (270.0) 

FRS 17 deficit in the schemes (63.8) (91.8) 

Related deferred tax at 12.5 to 30 per cent 11.4 16.1 

Net pension liability (52.4) (75.7) 

64 



Movement in pension liability during the year 


€m €m 

Pension deficit in schemes at 1 January (91.8) (82.4) 

Movement in year: 

Current service costs (12.4) (13.5) 

Past service costs (0.1) – 

Gains on settlements or curtailments 1.5 – 

Employer contributions paid, including special contribution of €5.2 million 

(2005: €10.0 million) 19.8 24.3 

Other finance costs (2.0) (2.4) 

Actuarial gain/(loss) recognised in the statement of total recognised gains and losses 21.6 (17.3) 

Translation adjustment (0.4) (0.5) 

Pension deficit in schemes at 31 December (63.8) (91.8) 

Deferred tax at 1 January 16.1 13.6 

Movement in year: 

Charged to profit and loss account (0.6) (0.9) 

Recognised in the statement of total recognised gains and losses (4.2) 3.3 

Translation adjustment 0.1 0.1 

Deferred tax at 31 December 11.4 16.1 

Pension liability net of related deferred tax (52.4) (75.7) 

The actuarial gain recognised in the statement of total recognised gains and losses is €21.6 million (2005: €17.3 million loss). 

The gain arises from improved investment returns of €6.8 million (2005: €17.0 million) and the favourable impact of changed 

assumptions (higher interest rates used to discount future scheme liabilities offset by revised mortality assumptions) of €18.4 million 

(2005: €34.8 million loss), offset by experience losses of €3.6 million (2005: €0.5 million gains). 

65 



19 Holding Company and Principal Subsidiary Undertakings 

The holding company is Musgrave Group Plc and its principal subsidiary undertakings are: 

Name 

Incorporated in the Republic of Ireland 

Musgrave Limited 

Musgrave Group Properties 

Musgrave Ireland Limited 

Principal Activity 

Wholesaling and distribution 

property investment 

Finance company 

Incorporated in Northern Ireland 

Musgrave Investments Plc 

Musgrave SuperValu Centra (Northern Ireland) Limited 

Musgrave Distribution Limited 

Investment holding company 

Wholesaling and retailing 

Wholesaling 

Incorporated in Great Britain 

Musgrave (UK) Limited 

Budgens Stores Limited 

Budgens Distribution Services Limited 

Budgens Property Investment Limited 

Londis (Holdings) Limited 

Investment holding 

Retailing and distribution 

Distribution 

property investment 

Distribution 

Incorporated in Spain 

Distribuidora de Alimentacion del Sureste S.L. 

Wholesaling and retailing 

The Group holds a 100 per cent share in each of the above subsidiaries. 

66 


Printed on Hello silk, fully recyclable and biodegradable. Paper mill ISO 14001 and EMAS accredited. Printed by MWL Print Group, ISO 14001 accredited. 

This year Musgrave and its retailer partners featured strongly in all the major industry award ceremonies in all our 

key markets. Highlights include Checkout’s Best in Fresh, Forecourt & Convenience Retailer of the Year, National 

Hygiene & Food Safety Award, Asian Trader’s Neighbourhood Store of the Year and the Retail Industry’s Community 

Retailer of the Year. 

Special mention should be made of our Excellence through People Gold award from FÁS, Ireland’s national training 

and employment authority and Sustainable Energy Ireland’s Renewable Energy Project award for our Cork head office. 

n BT Cork Chamber 

Musgrave Group Company of the Year Award 2006 

n JPMorgan business honours 

Musgrave Group Winner, Business Success Category 

SuperValu & Centra Republic of Ireland 

n Parents’ Choice Award 2006 SuperValu 

n Excellence Ireland Quality Awards 

Ryan’s SuperValu, Glanmire National Hygiene & Food Safety Award 

Ryan’s SuperValu, Ballyhaunis Hygiene & Food Safety Award, 

Large Retailer Category 

Prendergast’s Centra, Glasthule, Dublin Small Retailer Category 

n Forecourt Awards 

Kilmartin’s N6 Centra Service Station Ireland’s Forecourt & 

Convenience Retailer of the Year 2006 

Also winner of three categories: Best Food-to-Go, 

Best Convenience Store of the Year and Best Forecourt Facilities 

n Checkout Best in Fresh Awards 

Scally’s SuperValu, Clonakilty Fresh Meat Offer 

Twomey’s SuperValu, Deansgrange, Co. Dublin Best in Fresh 

Offer, Store under 18,000 sq ft category 

Casey’s Centra, Roscommon Forecourt 

n Shelflife Convenience Store of the Year 

Kilmartin’s N6 Centra Service Station 

SuperValu & Centra Northern Ireland 

n Neighbourhood Retail awards 

Centra, Chichester Street Convenience Store up to 1,500 sq ft 

SuperValu, Aughnacloy Convenience Store 3,501-7,000 sq ft 

Centra, Stranmillis Newcomer 

n Retail Industry Awards 

Centra, Moat Filling Station Training Initiative of the Year 

n Forecourt Awards 

Centra, Finaghy Best Newcomer 

Centra, Donaghadee Training Initiative 

SuperValu, Aughnacloy Best Customer Service 

Centra, Ballymoney Best Soft Drinks 

SuperValu, Dromore Best Forecourt with an Off-licence 

n NI Investors in People achievers in 2006 

SuperValu, Magherafelt; SuperValu, Cookstown; 

Centra, Ballykelly; Centra, Derry Strand Rd; Centra, Belfast 

Botanic Ave; Centra, Omagh Brookemount; SuperValu, Dungiven; 

Centra, Draperstown; Centra, Coleraine; Centra, Tandragee; 

Centra, Belfast Chichester St 

Budgens & Londis Great Britain 

n Retail Industry 

Terry Philpott, Londis, Castle Cary Community Retailer of the Year 

Guy Warner, Budgens Broadway Community Retailer of the Year, 

Highly Commended 

Dee Sedani, Londis, Etwall National Lottery Retailer of the Year 

n Asian Trader 

Bill Karavadra, Budgens, Groby Health & Beauty Retailer of the 

Year 

Vic Grewal, Budgens, Chorleywood Customer Care Award 

Tej Daffu, Budgens, Tooting Neighbourhood Store of the Year 

n Scottish Grocer 

Jindy Aujla, Londis, Glasgow City Store of the Year 

Emma Kinsman, Londis, High Blantyre Employee of the Year 

Enrico Giovanacci, Londis, Inverkip Symbol Store of the Year 

Enrico Giovanacci, Londis, Inverkip New Store of the Year 

n Scottish Local Retailer 

Asif Ashraf, Londis, High Blantyre Soft Drinks Retailer of the Year 

Sood Enterprises, Londis Forecourt Retailer of the Year 

n Achievers Academy 

Ben Patel, Londis, Minster Best Shop Layout 

Malcolm Jones, Londis, Yarnton Most Effective Ranging 

Sudeep Patel, Londis, Greenford Best Customer Service 

Andy Hill, Londis, Middleton St George Best Marketing to 

Customers 

n Wiseman Awards 

Atul Karavadra, Londis, Blackthorn Gold Award 

Naeem Javid, Londis, Glasgow Excellence in Food-to-Go 

Atul Karavadra, Londis, Blackthorn Community Involvement 

Atul Karavadra, Londis, Blackthorn Excellence in Food-to-Go 

Steve Green, Londis, Barlaston Excellence in Milk Merchandising 

Terry Philpott, Londis, Castle Cary Best Specialist Retailer 

Barrie Dear, Londis, Edinburgh Most Unique Initiative 

John Whittingham, Londis, Llanfair Excellence in Forecourt 

Retailing 

n Convenience Store Sales Assistant of the Year 

Lee Firth, Londis, Canterbury Symbol Store Sales Assistant of the 

Year 

n Checkout Convenience Award 

MBL Chilled & Fresh Award 

Nick Davey, Budgens, East Horsley Convenience Store Manager of 

the Year 

n Motor Transport Driver of the Year 

Alan Billingham, Londis RSC, S Elmsall Driver of the Year 

n Society of Food Hygiene & Technology Awards 

MBL Company of the Year 

n Forest of Dean Retail Awards 

Mark Richardson, Budgens, Newent Community Retailer of the 

Year 

n Somerset Federation of Small Business Awards 

Terry and Melanie Philpott, Londis, Castle Cary Training Initiative 

of the Year 

n Great Taste Awards 

Robert Byford, Londis, Leigh-on-Sea Gold Award for Sweet Cure Ham 

Our industry awards 2006

our values 

Long-term stable relationships 

Not being greedy 

Honesty 

Working hard 

Achievement 

Musgrave Group Plc 

Musgrave House, Ballycurreen 

Airport Road, Cork, Ireland 

Tel +353 (0)21 452 2100 

Fax +353 (0)21 452 2244 

Email group@musgrave.ie 

www.musgrave.ie

Annual report & review 2006 - Shopic.com

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