Posted on Wednesday 17 October 2012 by Ulster Business

Tesco

First Minister Peter Robinson opened Tesco’s Taste NI event, a showcase for local suppliers

Retail giant Tesco has committed to sourcing £1bn worth of local Northern Ireland produce over the next two years.

The announcement was made as Tesco opened a brand new 43,000 sq ft store on the Castlereagh Road in East Belfast and followed on the heels of its successful Taste NI event for local suppliers.

Tesco stocks more than 1,200 lines of Northern Ireland produce from almost 100 local suppliers and has spent around £500m with these suppliers in each of the past two years.

Tesco's Managing Director for the island of Ireland, Gary Mills, told Ulster Business he expected the amount spent on locally sourced goods to keep increasing.

"We have been growing our local supply base by approximately 10% every year. A decade ago we were getting £50m from local suppliers. The number of suppliers who now work with us is around 100 and we're gradually trying to include artisan suppliers, who in the past may not have had access to Tesco," he said.

"It will be over the £1bn number and we do target ourselves every year to increase that by bringing on new suppliers. It is a strong goal for the local commercial team to continue to do that. We know how important local food is to people in Northern Ireland and we want to make sure as many of those suppliers as possible are on the shelves."

Mills said the retailer also aims to have a wide range of locally sourced products, with more than 200 new local lines introduced since March this year alone and more in the pipeline.

He said while shoppers know they can find produce from their favourite local companies such as Irwin's, Wilson's Country, Dale Farm, Ormo, Fivemiletown Cheeses, Finnebrogue and Tayto instore, it was also increasing support for smaller producers and lesser known brands – many of which were showcased at its recent Taste NI event in central Belfast.

"We had 20,000 visitors through the doors which took us by surprise," said Mills. "It shows how important local food is to the economy in Northern Ireland. It was a great opportunity for local suppliers to showcase what they are doing."

On the downside, the commitment to local sourcing and the new store opening came in the same week that the global company posted its first fall in profits since 1994 while rival Sainsbury's saw profits rise.

The UK's biggest supermarket chain posted pre-tax profit for the first six months of its financial year of £1.7bn, down almost 12% from the same period last year. It said this was largely down to a £1bn investment programme to improve its UK stores.

Tesco has refurbished six stores in Northern Ireland this year and the opening of its Castlereagh site takes its presence in the province to more than 50.

The £24m investment in the Castlereagh store will create almost 90 new jobs and see 140 staff move from its Connswater store, which is being downsized into a Metro convenience store.

Mills said the Castlereagh Road location afforded customers better access and gave the company scope to tap into a bigger catchment area of shoppers.

"It is a really good location that will give consumers easier access to a major superstore. We've done research into the catchment area and we think it will complement the existing locations we have in the area at Cregagh Road and Newtownbreda," he said.

Tesco last month pulled out of a proposed new store at the Opportunity Omagh development, but Mills said it is still committed to the Omagh area, and also has other new stores in the works.

"While that particular site wasn't just what we are looking for we are still interested in other locations in Omagh," he said.

"At Banbridge we got planning for an Extra store in the Bridgewater outlet mall. We're also putting a store in Newry early in 2013 which is quite exciting because we're not represented there. And there are a number of other plans in the pipeline including plans for the a store in Londonderry."

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