Musgrave saves Irish grocer Superquinn

Musgrave will leapfrog Tesco after buying upmarket chain Superquinn – subject to regulatory approval – on Tuesday, the day after it fell into receivership.

Musgrave, which operates the Budgens and Londis brands in the UK, and Supervalu, Daybreak and Centra in Ireland, will have a 27.8% share of the Irish grocery market, including Superquinn. Tesco has 27.6% and Dunnes has 23.4%.

Superquinn has, however, been losing share. In the 12 weeks to June 12 it had 6.1% share, down from 6.7% the same period the previous year.

Musgrave said it will use its brand expertise to develop the Superquinn business.

Superquinn, founded in 1960, was placed into administration by its banks with debts reported to be in excess of E400m (£350.9m) largely due to property investments leaving it with onerous leases. KPMG was appointed administrator. The sale secures the jobs of 2,800 staff.

Musgrave chief executive Chris Martin said buying Superquinn supports its growth agenda and “will sustain our competitiveness”.

A spokeswoman for Musgrave said Superquinn is a good fit for the company as “it operates predominantly in the greater Dublin area where we have traditionally had a lighter footprint”.

She said Superquinn will be run as a separate company and the management, under chief executive Andrew Street, will remain.

She explained Musgrave had done due diligence on Superquinn before it fell into administration as the grocer was in a sale process, but that collapsed due to its debts. She said: “It’s a great company but has suffered from under-investment.”

Superquinn, known as the Waitrose of the Irish retail market, was built up by the Quinn family which became known for innovative retailing. It was sold in 2005 to Select Retail Holdings.