Spar boss warns on city staff crisis as it expands

BWG, which controls the Spar and Eurospar brands in Ireland, has announced a €25m investment to 45 new stores, but warned that rising staff costs have become an issue.

But Leo Crawford, the CEO of BWG, which controls the Spar and Eurospar chains in Ireland, said the challenge hasn't yet put it off expansion plans.

He was speaking as BWG, which is 80pc-owned by the South Africa-based Spar group that controls the symbol chain, yesterday announced a €25m investment in its business here that will see it open 45 new stores across the country by 2020. Ten of the new stores will be at greenfield sites and the move will create around 1,000 full and part-time jobs.

The chain has used Ireland to develop a major new store concept that might be rolled out across its network - to countries including the Netherlands, China, Saudi Arabia and South Africa. The group oversees 12,000 outlets.

The new stores - one has already opened near the Jervis Shopping Centre in Dublin city - incorporate a brand-new layout, digital signage, improved food offers, and high-speed wifi.

A greenfield location in Tralee, Co Kerry, opens next week, while another greenfield site in Tullamore, Co Offaly is nearing completion. A number of stores are being revamped.

"Availability of staff is a huge problem," Mr Crawford told the Irish Independent.

"That's particularly in city centre areas. That's down to many factors but a huge factor is that for staff to operate in the city centre they need to either live in the area or be able to easily commute," he said. "Those costs are increasing all the time for staff, which is really just pushing that cost problem on to all small and medium-sized enterprises."

He said it was "absolutely" the case that in selecting new store locations BWG has kept in mind whether staff will be available, especially given lessons from the recession.

"You're a price-taker in terms of your wage costs," he added. "You've got to find innovative ways to grow your top line and to grow your margin."

He said that the food service area could be a "fertile ground for dealing with cost challenges".

The investment by BWG in its Spar and Eurospar network comes as an extremely competitive grocery market continues to push grocery prices into deflation.

Multiples are also trying to stand out with new offers. Last week, Cork-based retailer Musgrave, which controls the SuperValu chain, agreed to acquire the upmarket Donnybrook Fair chain in a deal worth up to €25m. It snatched the agreement from under the nose of Dunnes Stores, which had also been trying to buy the niche retailer. Dunnes has also invested heavily in its high-end food ranges and offers.

BWG aims to grow its Spar, Spar Express and Eurospar estate in Ireland to about 500 outlets. BWG also owns UK business Appleby Westward, which operates 294 Spar stores in the south-west of England.

Mr Crawford said BWG had a "very strong financial year" to the end of September.