Tricky times for Dunnes, despite better UK profits

Secretive Irish retailer Dunnes Stores improved pre-tax profits at its mainland UK operations to£4.5 million from£4.2 million in the year to January 31.

But the feat may prove difficult to replicate as store numbers have shrunk from 11 to nine, with shops in Billingham on Teeside and Southampton closing.

The 7 per cent profit hike for the reported period was accompanied by turnover up 9 per cent from£38.5 million to£42 million.

However, operating profit dropped by 6 per cent to£3.7 million from£3.9 million.

A contributor to lower operating profit was the much-increased staff costs of£5.1 million against£3.9 million. The average number employed was 503 against 430 in the previous year.

There is speculation that the family-controlled group is preoccupied by a power vacuum at its Dublin head office as a result of the exit of two senior executives. It was claimed the departure of corporate services director Pat O'Donoghue and finance director Liam McGreal was coincidental, but some commentators suggested it was symptomatic of the problems non-family directors face in the company.

Retail Knowledge Bank research director Robert Clark said Dunnes' UK figures reflected just how far the chain has to go on the British mainland.

He added that opportunities such as the former C&A sites and the Littlewoods disposal have passed the retailer by.

In its home territory, Dunnes' position as Ireland's leading grocer has been usurped by Tesco.