Store profile: Gala

Safety first

Following the successful revamp of their Nenagh, Co. Tipperary store, Sean and Shane Mulrooney tell Julia O’Reilly how Gala Retail has helped them grow at a challenging time

Gala Retail operations executive Sandra Nicholson, store owner Shane Mulrooney, store manager Gillian McLaughlin and store owner Sean Mulrooney

STOREPROFILE

Mulrooney’sGala

Address:Nenagh,, Co. Tipperary Retailers:Sean and Shane Mulrooney Size:2,000sqft Staff:23 full and part-time

Back in November 2005, Sean and Shane Mulrooney leapt at the opportunity to take over Londis, Nenagh, Co. Tipperary and convert it into a Gala store.

“We were quite green at the time,” says Shane, “we had only just started in retail in 2001 so it was a quick learning curve to say the least!”

This response reflects a modesty in Mulrooney, who later adds: “That was our third store, we’d previously had two others.”

Today, the Mulrooneys have five stores altogether, with four in Tipperary and one in Offaly.

Changing times

The duo were clearly up to the job: “It’s been 15 years and we’ve been trading here ever since,” Sean tells us. In that time, the 2,000sq ft site has gone through many changes, the biggest of which came last year when the Mulrooneys undertook a massive renovation.

“Since 2005 we’d only done one other revamp, and it was just a small cosmetic change,” says Shane. “But this was a fullblown revamp. We wanted to update the store to align it with the new contemporary Gala image.

“We changed the entrance of the shop, “Between Gala Retail and our wholesaler added a sit-down area, got new counters, BWG/4 Aces, we were guided throughout,” shelving, floors, ceilings, LED lighting, and says Sean. “They provided us with support on refrigeration. I don’t think there’s anything what to do at each stage of the revamp. It was left from the old shop,” he adds with a laugh. invaluable really.” “It’s all new. We wanted to make the space as economical as possible.” Trading through renovation Luckily, the team were not forced to close Latest concepts their doors during the renovation. “We were The site also boasts the latest Gala category able to keep trading throughout because we concepts, including a Galato ice cream station, New Street Deli and Coffee Junction, as well as an expansive fresh food range. “We have all our own fresh food lines in store, which is unique in our area,” says Shane. We offer freshly made dinners, salads and spider fridge produce. We also have our own bakery in Roscrea where we make fresh scones, breads, and rolls for the deli. We also do our own occasion and take-home cakes.”

It is apparent that the Mulrooneys had ample support during the process: The and store showcases Coffee Junction, an as appetising New Street Deli offering well as an expansive fresh food range

renovated it bit by bit,” Shane notes. “We only lost around a day’s sales in total during the whole revamp, so it wasn’t too bad at all.

“It was section by section, night and early morning work. I might as well have been living there for a while,” he laughs. “A revamp is an experience in itself and we were delighted when it was finally finished.”

Just as things settled down in the Nenagh store however, the onslaught of Covid-19 took its toll on the operation.

Impact of Covid-19

As was the experience for many retailers, Mulrooney’s Gala saw a drop in sales when the country went into lockdown. “Our sales definitely took a hit,” says Shane. “People weren’t travelling or were afraid to go out. They’d only come out to get the bare essentials.”

To contend with the challenging circumstances, the store temporarily limited its trading hours. “We had to reduce hours a bit at the start, but once things started picking up, we were back to full hours again.

“After about six to eight weeks, we started to notice a change,” he adds. “The big pull has been groceries. We found ourselves getting two big grocery deliveries a week, whereas we would usually just get one big delivery and a smaller top-up delivery. It’s been a very challenging time, but now we’re practically operating at our normal levels - just in different categories.”

“All this time, we have been trying to look after the welfare of our staff,” says Shane. “We have 23 part and full-time staff, so our priority is to make sure they, and our customers, are looked after.”

Staff were fitted in masks or face shields, precautionary signage was erected, and a maximum of 12 shoppers were allowed in store at any given time.

“We made sure we implemented all the necessary social distancing policies and were operating in the safest way possible.”

Support

Gala Retail has been on hand to provide the team with guidance during this tough time, a move that was clearly appreciated by the Mulrooneys.

The Mulrooneys have their own bakery in Roscrea where they make fresh scones, breads, and rolls for the deli, as well as serving up their own occasion and take-home cakes

“Between Gala and BWG/ 4 Aces, we’ve been kept up to date with the latest updates and government changes,” Shane tells ShelfLife. “As soon as an update is announced, myself and Sean receive emails detailing what that means for us. It’s great because we can then pass that information onto our team.

“When the folks from Gala were able to get out on the road again, they were able to walk around our store, assess things, and see if we were missing out on anything,” he continues. “We’ve got good support on all sides, we’re very lucky.”

Team effort

The Mulrooneys have nothing but admiration for their hard-working Nenagh team, which is helmed by store manager Gillian McLoughlin.

“Gillian’s been brilliant, especially during the big projects that have been going on over the last while,” says Shane. “When we were doing the revamp last year, she was so hands-on and always made sure that protocol was being followed. It was no surprise then that when Covid-19 hit, Gillian ensured that we were up to date and adhering by the policies that Gala and the government had set for us.

“Sean and I aren’t in the store every day, so it’s great to know that we can rely on our stellar team. I’m very appreciative of the work they’ve put in,” Shane adds. “It’s been a hard time, but fair play to them because they’re doing great.”

While things have not been easy, he is proud to say it has been worthwhile as customers have responded positively to all they’ve done.

The store benefited from an extensive renovation last year, with the addition of a sit-down area, new counters, shelving, floors, ceilings, LED lighting, and refrigeration

Excellent feedback

“We’ve stepped up to the plate and the feedback we’ve got from customers has been brilliant. Footfall has increased, I think because people feel more at ease with our safety procedures in place. We’ve had several customers say they’re been trying to avoid large supermarkets for the time.”

Few retailers would disagree with Shane when he says that customer service is a top priority in his line of work. “If something

Customers can pick up a freshly served Lavazza coffee at the in-store Coffee Junction, alongside some tasty treats

goes wrong, you’ll hear about it tenfold. But if you have good customer service, it has a boomerang effect, customers will come back again and again. That’s why when Covid-19 broke out, it was so important to us to ensure that we had everything in place to keep our customers as safe as could be.”

“With Covid-19, it’s impossible to predict what’s going to happen,” says Shane thoughtfully. “But if there is another big spike, we’ve already laid the groundwork here. We have all the procedures in place now. Our staff have been trained, and we have proved to our customers that we take the health and safety measures seriously.

“For now, our plans for the future are to continue to run our shop to the highest standard, and to make sure it remains safe for our customers and staff.” ■

Retail Convenience

2020 H1 Insights

Grocery & Convenience sector demonstrated unflinching commitment to customers and communities during unprecedented trading conditions in H1 2020.

Summary • Unprecedented Growth: Exceptional growth delivered by grocery retailers linked to Covid19 related demand. Shopping behaviour and frequency patterns favoured larger operators in the Irish market. • Customer Goodwill: Sector response to pandemic; supporting communities and vulnerable in society has generated goodwill and trust towards retailers and their staff. • Investment: Store revamp activity was paused for a large proportion of H1 2020 due to Covid19 restrictions. Retailers are now re-commencing revamp and store purchase proposals.

Bank of Ireland continues to actively engage and support grocery retailers with investment plans.

2020 H1 Key Trends • Strong growth in take-home grocery sales linked to

Covid19 customer requirements and behaviour. Growth of 25% delivered in the 12 weeks to 17 May 2020 per Kantar; the largest growth recorded in 15 years. • Supervalu, Dunnes and Tesco continued to compete strongly for the no. 1 spot in grocery market share with

Aldi & Lidl maintaining a strong foothold in the Irish market. Supervalu is now the largest grocer benefiting from its extensive community focused store network and online capability. • Covid 19 has driven a large divergence in performance amongst convenience focused operators. Neighbourhood stores (Centra & Eurospar) have reported a strong performance whereas many city/town centre and forecourt stores have seen a significant deterioration in footfall linked to increased working from home practices etc. • The Irish consumer now expects a frictionless/accessible shopping experience linked to health and safety and progressive retailers are continuing to invest in omnichannel strategies and technology (click & collect/on-line loyalty clubs) to drive improved engagement opposite their customers and employees.

Sector Developments –H1 2020 Key Numbers • 25%: Grocery sales increase in 12 weeks to 17 May 2020 per Kantar. • 76%: Increase in online grocery sales v H1 2019. A significant shift in consumer behaviour driven by necessity, albeit from a low base. • 25%: Growth in sale of Irish products in-store per Nielsen (May 2020) as Irish consumers become more provenance and traceability focused. • 73%: Increase in hair colorant sales in the 12 weeks 17th May –reflecting Covid19 specific requirements underpinning sales growth. • 1000%: Sales increase in hand santiser in week ended 8th March –health and safety will continue as a priority for the Irish shopper in their store/retailer preferences. Key Activity in the Sector in H1 2020 • Despite exceptional demand, the overall grocery supply chain proved robust; a testament to the contingency plans in place by Irish grocery operators/wholesalers. • Proactive initiatives put in place to protect both staff and customers;

Perspex screens, Rota re-alignment, contactless payment increase etc. Strong sector collaboration with Government and Health &

Safety Authority. • Shopping patterns have reverted to the “Big weekly grocery shop”.

This has led to a negative impact on gross margin percentage as less impulse/more considered shopping behaviour emerges. • Retailers are continuing to implement pragmatic succession planning structures to ensure that appropriate long-term value is delivered from their business. Covid19 has been a catalyst for some retailers to investigate future options.

Approval Activity Value % Approval Activity Value % 2020

11%

12%

44%

33% Approval Activity Value % 2019

7%

26% 40%

27%

Refinance

Freehold Purchase Revamp Working Capital

Sector Developments: Investment and Consolidation • Tesco has continued its contraction strategy by selling its operations in Thailand, Malaysia and Poland in recent months. Cork man, Ken Murphy will take over as Tesco

Global CEO in H2 2020. (Source: Checkout Magazine,

June 2020)) • Musgrave was granted planning permission in April for a new Supervalu store in Newcastle, Co Dublin continuing the brand’s recent expansion in the Dublin commuter belt region. • A number of key executive appointments have taken place in H1 2020 –Niall O’Connor has been appointed

MD of Aldi Ireland & Shane Flynn has been appointed MD of Avoca by its parent Aramark group. (Source: Shelflife

Magazine, June 2020) • Consumers continue to have a key focus on food provenance and healthy options. This demand is being met by expansion/ investment from Fresh the Good Food

Market and Nolan’s of Clontarf amongst others. Musgrave has signed an exclusivity agreement with The Happy Pear for the island of Ireland and BWG has launched a healthyeating guide in conjunction with the FAI. • A significant pipe-line of funding activity developed in H1 2020 despite Covid19 impact with revamp / freehold purchase accounting for c45% of approvals as progressive Irish retailers seek to future-proof their business.

Retail Convenience

2020 H2 Outlook

A continued up-weighted focus on customer/staff safety, health and wellness. Margin preservation key linked to change in consumer behaviour.

2020 Key Numbers • €300k: Level of investment from Centra to promote “Guaranteed

Irish” brands as part of a new partnership. • 1,200: The reduction in carbon emission tonnes which Tesco aims to deliver from its partnership with Green Generation, a

Kildare based green energy operation. • 9: The number of expected new stores unveiled to the Irish market by Aldi in 2020 under the stewardship of new MD,

Niall O’Connor. • €6m: Level of Funding raised by Buymie an Irish firm led by

Devan Hughes to expand its online grocery platform across

Ireland and UK. Recent partnership signed with Co-op stores in

UK. • 76%: The percentage of people who now use contactless weekly per statistics from the Irish Banking and Payments Federation. (May 2020)

2020 H2 Retail Convenience Sector Outlook • Robust Outlook: Overall a resilient sector to economic shocks; no renewed restrictions will be key for footfall re-instatement in high convenience and forecourt stores. • Funding Activity: Strong active pipeline of store purchase and revamp proposals–retailers recognise that customer experience/ excellent standards will be key to attract and retain market share. • Partnerships: Increased collaboration/partnership agreements between grocery retailers and producers/restaurants/foodservice operators expected.

Market • Significant revamp programme rolled out in H2 2020 nationwide by leading grocery operators as the ever more discerning consumer seeks excellence in store standards. Increased volume of activity linked to restrictions in H1 2020. • Detailed analysis pre and post revamp will be an imperative to ensure that maximum return on investment is delivered via sales mix improvement, margin growth and cost saving.

Bank of Ireland is regulated by the Central Bank of Ireland.

You should obtain independent legal advice before making any decision. Increased collaboration/partnership agreements between grocery retailers and producers/restaurants/food-service operators expected as they seek to provide a healthy/nutrition focused differentiation point for the Irish consumer. The long-term model adopted by high convenience and Forecourt retailers will be examined –can they effectively pivot towards grocery top-up and/or a hub for people working from home through increased delivery capability? Corporate social responsibility linked to sustainable and environmentally friendly in-store activities will be a key area of focus for all retailers –energy efficient equipment, elimination of single-use plastic, improved recycling facilities and reduction of food waste. All retail businesses will need to focus strongly on margin preservation in H2 2020 linked to functional/more considered shopping behaviour.

Funding Activity • Revamp activity to restart linked to a proactive revamp strategy from progressive retailers nationwide (subject to no further

Covid19 linked restrictions) • Store sale activity primarily linked to succession planning will continue to develop in 2020. Leasehold retailers will continue to see opportunities to purchase the freehold interest of their stores. • Refinance activity projected in the sector in H2 2020 linked to exiting banks and loan book purchasers seeking to deleverage. Bank of Ireland • As Ireland’s leading business bank, we recognise that we have a unique opportunity to support our customers and to enable Irish businesses and the communities we jointly serve to thrive. • Our proven financial capabilities and appetite, combined with comprehensive sector expertise, provide us with a strong platform to meet the funding requirements of Irish retailers. • We understand the investment cycle, including the need for regular expenditure to maintain growth and profitability in this dynamic sector, and we have a strong appetite to support progressive, innovative retailers in the further development of

This document has been prepared by Bank of Ireland for informational purposes aonly. Not to be reproduced, in whole or in part, without prior permission. Any information contained herein is believed by the Bank to be accurate and true but the Bank expresses no presentation or warranty of such accuracy and accepts no responsibility whatsoever for any loss or damage caused by any act or omission taken as a result of the information contained in this document. their businesses in 2020.

Owen Clifford Head of Retail Convenience

Email: owen.clifford@boi.com Mobile: 087 907 9002

Owen joined Bank of Ireland in 2015 as Head of Retail Convenience. Owen previously worked for Musgrave Retail Partners Ireland where his role involved supporting independent retailers to maximise their profitability and to develop long-term, sustainable business models. During this time, Owen developed significant knowledge of finance, operations and legal / regulatory requirements specific to the retail convenience sector.

Owen holds a BA in Law and Accounting from the University of Limerick and is a Fellow of the Institute of Chartered Accountants Ireland and an Associate of the Irish Taxation Institute and previously held roles with Pricewaterhouse Coopers and Deloitte.