Markets update: Irish and UK markets green but mixed picture in EU as French index falls
Markets
Markets update: Irish and UK markets green but mixed picture in EU as French index falls
Megan O'Brien
08:53
Photo: Javier Ghersi
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Irish Examiner
an hour ago
- Irish Examiner
Spar wants a bigger slice of Ireland's €15bn grocery market
South African headquartered Spar group, in releasing its half-year reporting last week, announced its plan to withdraw from its extensive operations in Switzerland and the UK, but in a surprising move, declared its intention to double down on its investment in Ireland. The group's decision to offload its Swiss and UK retail businesses is part of a strategic realignment towards a more profitable international presence. Spar group chief executive Angelo Swartz stated the group experienced a tough operating environment, particularly in its European operations, while the South African consumer remains under pressure as well. Spar group, which operates the eponymous business in Ireland, England, and Switzerland, as well as in its native South Africa, has reported a marginal decline in turnover, to R66.1bn (€3.26bn), in the first half of its financial year to March 28. In disposing of its Swiss operations, it will cut off €800m in sales, and a further €300m in its British operations. By comparison, Spar Ireland achieved record retail sales of €1.3bn in 2024. Spar's withdrawal from its Swiss and UK divisions highlights a broader trend of reevaluating European retail strategies amid uncertain market conditions. Spar's new business strategy, being unveiled, aims to build on the current momentum of the brand in Ireland. The strategy includes plans for new store openings, upgrading existing sites, and a new design for EuroSpar supermarkets. 'There's a cost-of-living crisis in Europe that's made those markets tougher than I can remember. And in South Africa, we've had an economy that's been struggling to grow for some time and consumers are under real financial pressure with relatively high interest rates, albeit coming down,' according to Angelo Swartz, Spar group chief executive. Commenting on Spar's apparent loss of upper-income shoppers, Swartz acknowledges the extremely competitive environment in the retail space. 'There's certainly truth in the observation that growth in our stores that cater to the lower end of the market has been more robust than at the top end,' Mr Swartz said. 'It's been more competitive at the higher end of the market, most certainly for us.' To prevent its Irish operations from following the same downward trend as its discontinued European ventures, the retailer plans to expand its private-label range, emphasising its value proposition to customers. They also plan to go further by ensuring a diverse product range that aligns with changing consumer preferences. This range must include more organic and healthier options, which will help it compete with major players like SuperValu and Centra in the Irish market. Spar operates with its local partner BWG group, as a leading convenience brand in Ireland and holds a relatively small share of the Irish grocery market, less than 1% according to Bord Bia. While this may appear minor compared to other large players, Spar have a significant presence as one of the largest convenience retail groups in the country, with more than 60 years of history and a network of 463 stores across every county in Ireland and providing employment for 14,000 people locally. Spar group's strategy for Ireland was positively impacted by gross margin increase in recent years, with local performance boosted by lower gearing and cost savings, partially offset by increased labour costs, due to the minimum wage increase. Bord Bia conservatively estimates that the Irish grocery retail market is currently valued at €15bn. The quality of food on offer is of the highest standard. However, as in the world over, current global dynamics are driving up cost of living inflation, which will impact how consumers shop and how retailers respond over the coming months. Relatively speaking, the Irish grocery retail market is quite sophisticated in terms of store design and merchandising, remaining predominantly physical, with online a very small percentage of total sales (5.8%, 12 weeks ending January 26) but it is growing according to Kantar market consultancy. Much like Spar, who plan to open 50 more stores in 2025, other retailers in Ireland are still expanding store numbers to find growth. The Irish retail market is highly competitive, with three retailers: Dunnes Stores, Tesco, and SuperValu (part of Musgrave Group) holding 67.7% of the market between them. Getting a bigger slice of the €15bn Irish market, is clearly a key strategic goal of the Spar group management, but the 'big three' supermarkets won't give up market share without a fight. Read More Irish Mortgage Corporation unveils its new joint managing directors
The Irish Sun
2 hours ago
- The Irish Sun
‘Cruel decision' blast over new rent cap shake-up as Irish renters brace for price hikes amid calls for more homes
OPPOSITION parties have blasted the government's rent shake up - with the Cabinet set to vote in an easing of controls this week. Landlords will be able to 3 Irish renters are set to brace for price hikes amid a major rent cap shake up Credit: Getty Images - Getty 3 Changes to the Rent Pressure Zones will be brought to Housing minister James Browne Credit: Brian Lawless/PA Wire Rents for newly-built Changes to the Rent Pressure Zones will be brought to Government by Minister for Housing Government sources said the move is aimed at giving investors certainty given they currently can make a loss when inflation goes above the two per cent mark. Other measures to close the 'yield' gap and around 'viability' will be taken by READ MORE IN IRISH NEWS For existing renters, nothing changes if they stay in their current tenancy. However if they move, a landlord can reset the rent for the new tenant at the market rate. Any rent increases after that would be capped at the existing two per cent rate. MOST READ ON THE IRISH SUN But last night Chaos in Dail as numerous TDs storm from Chamber amid new speaking time rules The party's housing spokesperson Eoin O'Broin said: 'Cabinet looks set to agree far-reaching and deeply damaging changes to the current Rent Pressure Zone rules. 'The government's plans for a four-tier rental market is utter madness. 'There will now be four different rent-setting rules and eviction rules for tenants; in RPZs and in existing tenancies; in RPZs and in new tenancies in existing rental stock; in RPZs and in new tenancies in newly built rental stock; and renters in tenancies outside RPZs. Any decision the Government takes in relation to RPZs in coming days cannot pull the rug from under renters." Fine Gael TD Deputy Michael Carrigy 'Renters are being punished for the government's own housing failures with even higher rip-off rents and greater uncertainty. 'If these landlords are given the right to resent rents to new market levels, this puts tens of thousands of renters with pre 2022 tenancy agreements at risk of eviction. 'At a time when rents… are already too high, the government's proposals will come as another body-blow to hard-pressed renters.' EVICTION INCREASE FEARS And He fumed: 'Lifting the 2 per cent rent cap is a cruel decision by a government captured by investor fund landlords. 'There is no guarantee removing these rent caps will lead to an increase in supply of rental properties. 'In fact, it will encourage the investor purchase of new build homes as rental properties – further pushing up house prices and locking home buyers out of the housing market. 'Without a no-fault eviction ban in place, lifting the 2 per cent rent cap will lead to increased evictions and homelessness as landlords evict tenants to get a new tenancy and bring the rent up to market rents.' RENT ALREADY HIGH Meanwhile, Chair of the Oireachtas Housing Committee, He explained: 'Any decision the Government takes in relation to RPZs in coming days cannot pull the rug from under renters. 'There can't be just some sort of cliff edge or some switch that just gets flicked in terms of supports and safeguards for renters. 'The level of rent people are paying in this country is extraordinarily high already and that is largely down to a lack of supply which must change. 'We have to ensure we have a viable housing market. "Our clear goal is to increase the supply of new homes.' 3 Sinn Fein housing spokesperson Eoin O'Broin branded the proposal 'utter madness' Credit: PA
Irish Examiner
5 hours ago
- Irish Examiner
Overly bureaucratic policies to encourage entrepreneurship need to be reviewed
US president Trump's tariffs merry-go-round continues to dominate global headlines. Firms are weary of the oscillation between 'tariffs-on' and 'tariffs-off' — but this pattern shows no sign of abating. It's a truism at this stage, but uncertainty has become the new normal. Understandably, there is concern among Irish policymakers, and indeed the general public, as to what the new economic dispensation will mean for Ireland's FDI-led economic model. FDI companies operating in Ireland deeply value their presence here and the contribution this has made to their business. Many companies have invested heavily in Ireland and dismantling investment of this nature and locating it somewhere else is not easily done, even if firms were minded to do so. And though we don't detect any appetite of this nature in the market there is an issue, however, in relation to further growth of Ireland's stock of FDI in future. The continuing uncertainty is having an impact on firms' investment decisions as they look to incorporate a 'wait-and-see' approach. In this context, it is important to look at Ireland's capability to continue to deliver economic and employment growth in a (still hypothetical) world where the level of FDI is lower than it has been. The health and prosperity of our homegrown businesses will be vitally important in this scenario. Ireland has a track record of generating world-beating businesses, but the reality is the current policy environment is not calibrated to achieve our full potential in this area. Successive governments have sought to introduce various policies to foster more entrepreneurship. Adjustments are made year-to-year across budgets, but the day-to-day reality has been that the design of some of these schemes is not suitable to achieve the desired ends. Tax practitioners like myself and my colleagues are seeing this on a regular basis as we seek to help clients utilise these schemes. KEEP scheme Take the KEEP scheme for example. This is designed to enable companies to grant share options to employees on a tax-efficient basis, essentially so the share is taxed within the capital gains bracket rather than the income tax bracket. Granting share options to employees is a good way of supplementing their remuneration in an environment where large firms with deep pockets are competing for the same talent. The issue with KEEP, unfortunately, is it is not working in practice; take-up is extremely low. What we see in our practice is that firms will tend to opt for so-called 'unapproved' share schemes rather than KEEP, even though the unapproved schemes are taxed more heavily from the perspective of the employee. Why are they doing this? The biggest reason we can see is the limit that attaches to the total value of share options that can be issued to an individual employee (€300,000). There is also a limit of €6m on the total amount of share options that can be issued (across all employees) and unexercised at any point in time. These limits restrict firms' ability to offer really competitive packages across their companies. Instead, they are opting for unapproved schemes that mean employees can be offered a higher value of share options, albeit in a less tax-efficient manner. The UK equivalent of KEEP, which has much less red tape attached, works much better, and the Government should look to draw lessons from it. Angel investor scheme On March 1, the Government commenced the new angel investor relief scheme which aims to incentivise investment in startups by reducing capital gains tax to 16%-18% on the sale by angel investors of these investments. It is early days, but we are not optimistic for take-up. Again, there is a lot of administration work involved for the small firms that are the targeted beneficiaries. They need to hold two certificates, showing they are an innovative company that is a going concern, and obtaining these involves an application process which many companies would need to undertake. In addition, investment by family members, a common source of funding for early-stage companies, has restrictions attached. Taken together, we believe these will serve as a significant brake on uptake of this scheme. A relaxation of the restrictions on family members and a self-declaration process allowing firms to obtain the qualifying certificates would be preferable. Another way to increase take-up would be to allow the relief to apply where investment is directed towards follow-on or expansion funding, rather than simply angel investment. The above are two examples of how Ireland's policy regime could be enhanced to encourage more entrepreneurship. There are others, including changes to the oft-criticised entrepreneur's relief scheme. We know we have a fantastic, knowledgeable, skilled and talented workforce. We are lucky to have it. But at a time like now, when the outlook for growth in FDI is hazy, it's important that we consider how to drive homegrown businesses forward. In this regard, a wholesale government review of policies towards entrepreneurship is warranted. Brendan Murphy is a tax partner at Baker Tilly Ireland
