New in Retail: Dunnes New Food Market

New in Retail: Dunnes New Food Market

By: Sarah Loughlin

Sarah Loughlin is a country research analyst focusing on different industries including retailing, packaged foods, alcoholic drinks, consumer health and beauty personal care with over 4 years of experience in Euromonitor. She has a Bachelor of Science in Marketing from Dublin Institute of Technology. She is passionate about retail marketing and also has a keen interest in the area health and wellness.

This article is a part of Euromonitor International’s New In Retail series that showcases some of the most interesting retailing concepts from 2016. This month’s entry in the New in Retail series is an overview of the evolving business model of Dunnes Stores, a leading department store chain in Ireland focusing on apparel and grocery.

RE-IMAGINING THE TRADITIONAL MARKET SQUARE IN A DOWNTOWN SHOPPING MALL

Department stores form the majority of Dunnes outlets but the company also operates standalone supermarkets and apparel specialists.  While the company traditionally adopted a low price strategy, the recent successes of discounters and the phenomenal growth of apparel and footwear specialist Penneys (Primark) have undermined this strategy. While still remaining competitive on price, Dunnes has adopted a new strategy as a higher quality retailer.

Reflecting this new strategy, in November 2015, Dunnes relaunched its grocery department at St. Stephen’s Green Shopping Centre in central Dublin. The new layout, which was developed in partnership with the Italian store design consultant Schweitzer, is intended to give part of its grocery department an ambience more like a traditional food market than a conventional grocery store. Adjacent to the existing food hall is a square with food stands which Dunnes has branded its New Food Market. In addition, Dunnes has partnered with Sheridans Cheesemongers, which has established a shop-within-shop in the New Food Market.  Sheridans, which is widely known for its premium cheese offering, has a wide product portfolio that includes other food products such as olives and sundried tomatoes. Cheeses are placed on boards and the other products are merchandised in vats similar to what might be seen in a European market place. To complete the New Food Market there is also a consumer foodservice offering from Baxter Greene Market Café and Deli, also a Dunnes brand. This offers sandwiches, pastries, cakes and coffee, but also takeaway meals, such as Irish classics like shepherd’s pie and fish pie.

ATTRACTIVE LAYOUT IN FLAGSHIP STORE

The New Food Market concept within Dunnes stores is an example of a large retailer imitating a smaller local store. St Stephen’s Green is one of the busiest locations in Dublin in terms of footfall, at the top end of the renowned Grafton Street.  The introduction of specialists such as the Sheridans cheesemonger makes the shopping experience more personal for consumers. It is strong cooperation between two well-known Irish brands, particularly within the Dublin area where consumers are typically more affluent and have become a lot more discerning about the products that they buy.

There is a strong demand for fresh and local produce but there is still demand for convenience. There is a wide range of both packaged and unpackaged cheeses available to the consumer. The area surrounding the cheesemongers includes traditional deli counters such as meat and fish counters. There is also a bakery section which again portrays the concept of the New Food Market through the merchandising of its bakery products in old fashioned wooden boxes and wicker baskets. This adds to the overall customer experience as they feel they are stepping into something small and localised instead of a large supermarket chain. There is a clear distinction between the market section of the grocery store and the traditional grocery aisles which are located adjacently.

WELL POSITIONED TO TAP INTO INCREASING CONSUMER CONFIDENCE

The launch of Dunnes’s New Food Market has been driven by two partially conflicting trends.  Ireland’s economy showed strong growth in 2015 with a resultant rise in consumer confidence, increasing demand for more upmarket grocery retail offerings. On the other hand, grocery retailers in Ireland have seen increasing competition from discounters Lidl and Aldi. In the face of this increased competition, by launching the New Food Market concept Dunnes is trying to differentiate itself whilst taking its stores upmarket. Even though Dunnes has traditionally been known for its value, the company has recognised that in an increasingly polarised market place it will find it challenging to compete on price alone. The retailer is adding significant value by offering a localised feeling to the shopping experience for the consumer. Increasingly, Irish consumers are going back to basics, seeking out unrefined food items, and have a strong demand for quality produce. Food origin is as important as ever, with even foreign players emphasising their support for local suppliers. The strategy adopted by Dunnes Stores and particularly the collaboration with Sheridans has broadened the shopping experience for the consumer to make them feel like they are shopping locally and buying local produce.

The Sheridans cheesemonger concept could be highly successful, particularly during the seasonal period around Christmas, when cheese plates become increasingly popular. This concept is currently in two Dunnes Stores retail outlets in Dublin and while there is no indication that it will be expanded to further locations at the present time, there is a strong possibility that, as the economy continues to recover and consumers appreciate a more local approach to their shopping experience, it could well be seen in the grocery departments of all Dunnes Stores.

Have a question or a thought to add? Leave us a comment below.

Sarah Loughlin

 

You must be logged in to post a comment Login