Protocol 'creates massive opportunities' for Northern Ireland businesses - grocery boss
THE head of sales at the north’s biggest grocery supply operation has said the protocol “creates massive opportunities” for businesses in Northern Ireland.
Paddy Doody from the Henderson Group, was speaking after the company, which supplies around 500 Spar, Vivo and Eurospar stores in the north, recorded a turnover of £957 million during 2020.
The Mallusk-based business inched closer to becoming Northern Ireland’s next billion-pound company on the back of a 7.3 per cent rise in grocery sales during the pandemic.
But an extra £18m in Covid-19 costs, mostly within the 100 retail stores it owns and operates itself, coupled with a slump in the group’s fuel and foodservice business during lockdown, saw Hendersons end 2020 with a pre-tax profit of £28.5m, some 11.7 per cent down on 2019.
Speaking to The Irish News, Mr Doody said after the rollercoaster of 2020, the food and retail industry has been hit by a multitude of supply issues in 2021.
“Some of the issues have been Covid-related, some Brexit-related, some have just been down to the global economy. There are so many different things at play.”
He revealed the Henderson Group had been notified of some confectionary companies preparing to cut back supply this Christmas due to shortages of HGV drivers and difficulties in securing raw materials and ingredients.
“For us, we’ve been lucky because we source so much of our fresh products from first of all Northern Ireland and then island of Ireland, and then GB.
“The GB supply has potential to become problematic, in which case we’ll source from the EU,” he said.
Despite the ongoing political fall-out over the Northern Ireland Protocol, Mr Doody said businesses see a significant advantage by having “a foot in both camps” in terms of the EU Single Market and UK’s internal market.
“There is a danger that there will be a reduction in the range available, because the free movement of goods has ended,” he said.
“That’s the reality and that’s what Brexit is. Great Britain is out of the European Union, we’re still in a unique situation in Northern Ireland because we’ve got a foot in both camps.
“That creates massive opportunities, it really does. And our problem is the protocol has become a political issue between political parties.
“We as a business are apolitical and almost every business is apolitical,” he said.
The sales director described the Henderson Group’s high profile deal to supply Sainsbury’s in January this year as an opportunity borne out the Northern Ireland company’s forward business thinking.
The group completed a new 130,000 sq ft warehouse in Mallusk last year in a strategic move following continued growth in recent years.
“But then Brexit happened, and it just so happened we had significant warehousing capability.”
Amid the political uncertainty toward the end of 2020, the Henderson Group packed as much ambient and frozen stock into the warehouse as possible.
“We absolutely filled the warehouse,” said Mr Doody.
He added that stepping in to resolve Sainsbury’s supply chain problems had worked out well for both parties.
“The main thing is to make sure food supplies are getting to consumers here in Northern Ireland.”
The continued expansion of the company during 2020 through organic growth and acquisition saw the workforce grow by 300 to 4,171. The extra employees took staff costs to £97.8m (up from £84.6m).
But Mr Doody revealed that labour shortages are also becoming an issue in other parts of the business.
“We currently have shortages not just in drivers, but in warehouse operatives and front-line shop staff.”
While concerns remain over Brexit, inflation and the residual impact of Covid, the sales director said the business has continued to perform well in the first half of 2021.
“We’re positive about the outlook,” said Mr Doody.
“There are issues like Covid and Brexit, but we have confidence in our business model and confidence that we’re in every community throughout the north and we’re backed by some of the best independent retailers in the north.”