In a town where local shopping is more the exception than the rule, last Tuesday saw that most rare of occasions in the Louth retail sector – a full supermarket carpark. As the clock ticked down to the Tesco Drogheda's 10am opening, people peered through the windows, taking photos of price comparison posters and the new 'Change for Good' signage dotted around the store's exterior.
As far as numbers were concerned, Tesco could hardly have wished for more. TV news reports showed happy shoppers emerging laden with bargains, with a beaming Tony Keohane announcing that Irish shoppers no longer had to travel any further north to do their shopping.
What the full car-park also showed, however, was the intense level of scrutiny of Tesco's new model from both its competitors and suppliers. While many of those that flooded through the doors at 10am were curious locals, the number of retail industry 'suits' poring over the store's every aisle reached a level which even Tesco itself could barely have expected.
The concerns of the suppliers followed a series of revelations in recent months about Tesco's new sourcing model. As reported on these pages, Tesco has moved to leverage the scale of its international parent, with buying of international brands being centralised through the UK.
However, Tesco's cross-stocking, as it is known in the trade, was not the reason that so many suppliers flocked to Drogheda and the other border stores on Tuesday. With Tesco's new procurement model now accepted (albeit grudgingly) across the trade, suppliers were there to see how the second phase of this programme would play out – namely how the implementation of new store layouts (built to fit this new sourcing model) would impact on their (Irish) brands.
In a grocery market prone to hyperbole and exaggeration, particularly when it comes to an already unpopular organisation such as Tesco, it would be easy to dismiss the doom and gloom that has emerged in the 'Black Tuesday' post-mortem as the sour grapes of jilted suppliers.
However some of the biggest brand owners in the Republic have expressed huge concerns as to how their businesses can survive if Tesco decides to roll-out its plans across its full Irish estate.
While Tesco maintains that it has not removed Irish brands from its shelves, the evidence from Drogheda and the other border stores suggests that the retailer is being heavily disingenuous in its pro-Irish commentary.
Brands such as Chef, Roma and Barrys Tea may still be on the shelf; however the level of space they occupy (relative to UK brands) has been slashed. The number of SKUs – the industry code for different pack sizes and product variants – has also been reduced significantly for many Irish brands.
Indeed, even if Tesco's rather limited classification of what makes a brand 'Irish' is applied, (Tesco says that Irish brands are those physically manufactured in Ireland, whereas the industry would generally view products produced abroad but specifically for an Irish audience as 'Irish'), many products that are produced in Ireland are still seeing a far reduced presence in the new-look Tesco model.
Unsurprisingly, the industry is up in arms about this new model, even if no-one is willing to stick their head above the parapet. One of Ireland's biggest grocery suppliers said that he stood to lose over 60% of his total business with Tesco if the reduced ranging of his products was introduced in all the Tesco stores, while another said that across his portfolio of brands (most of which are category leaders), he expected an average 40-50 per cent reduction in sales through Tesco stores.
Like many other Irish suppliers who are now in the same boat, both companies would have turnover figures well in excess of €50m, both would employ hundreds of staff, and in both cases, Tesco would be one of their top two or three customers.
Furthermore, in both cases, these figures do not relate to 'cross-stocked' brands or the impact of being 'bypassed' to an international sourcing – they refer specifically to brands that are only sold on the Irish market but which are now either not stocked at all or have seen their range cut back heavily in the 11 border stores.
Tesco has moved to dismiss these concerns, saying publicly that consumer demand will determine what is stocked and what is not. The retailer has also argued that even if shelf arrangements have changed, if shoppers want to buy certain products they will seek them out.
However this assertion belies the inherent contradiction posed by the new planogram model; namely that if products are arranged in a certain way (or not stocked at all), consumers will simply choose other items. Choice, therefore, is determined by the retailer not the consumer.
This may be a worst-case scenario, particularly in categories where consumers are very brand loyal. It is hard to see, for example, how sales of Typhoo or PG Tips tea will eclipse those of Lyons and Barrys, even if the space allocated to these UK brands is more than double that of the Irish products.
However in other categories, where price is deemed more important and brand loyalty is less tangible, it's apparent to many industry watchers that the market share of some of the biggest Irish brands will inevitably be eroded.
Opinions vary on whether this is tough luck (for suppliers), a canny move (for Tesco), a great day (for consumers) or a big UK retailer making some of the same anglo-centric mistakes which caused it to leave the market in the 1980s. What is not in any doubt, however, is that the trade is at a key pivot point, with two key questions emerging.
The first of these is obvious (even if the answer is less so); namely how shoppers will react. However the answer to the second is even more uncertain, and that is the reaction of Dunnes and the other retailers in the market.
If Tesco can prove that Irish consumers do not really need brands like Chivers Jam (the market leader across the entire Irish retail sector – but now not on sale in Tesco Drogheda), will Dunnes turn around and make the same argument? Or will retailers such as SuperValu or Superquinn, which last week announced a big promotion on 'Ireland's Favourites', use the Irish angle as a key point of difference?
In either event, will Tesco's price reductions (across 12,000-plus lines) see heavy tit-for-tat promotions at other retailers – and given that Tesco has promised that these are long-term reductions, how long could Dunnes stay the pace if a head-to-head battle did emerge?
With retailers, suppliers and government all bemoaning the rise in cross-border trade, a full car park in a border county supermarket is clearly a good news story. Whether the National Consumer Agency, government and all those who have demanded lower prices care to see the story behind the headlines is another matter entirely.