Dunnes Stores is Irish retail stores that hold the second place among the five leading stores in Ireland. These competitor stores are Tesco, Superquinn, Supervalu, Lidl and Aldi. The store performance in the stock mark is also the second best among the competing stores. At the beginning of 2012, the market share of Dunnes store was 23.3 per cent (Reilly, 2012). The market share of the store by the end of 2013 had increased to 24.3 per cent, (Reilly, 2013).
As a promotion strategy, the store offers its customers 3 euro voucher and an additional 50 euro for shipping trips. Though it is a good strategy, this promotion makes the store lose 63,789,687 euros. This is because Ireland has a population of 4,593, 000 and given that the store has a market share of 24.3 per cent as at 2013, the total population that shops at this store is, therefore, 1,203,579, (CSO, 2013). Further, given that the store gives each customer a voucher of 3 euros plus a shopping trip of 50euro, the total promotion that a customer gets for free is 53 euros. Thus, given the number of people who shop at the store is 1,203,579 and that each customer receives 53 euros for free, then the store loses a total of 63,789,687 euros. This promotion strategy is not sustainable because even though the shop makes a lot of profit, due to the large population of customers who shop there, promotions should never cost a company such a large amount of money, (Reilly, 2013).
The company also decided to remove the car park so that it cuts down its costs. This presented a problem to workers because they had no place to park their cars. This meant that workers had to walk to work. Some female worker came from far distance and, therefore, arrived to work late. The company decided to charge was in a dilemma whether to charge each car 1 to 2 euros a week to pay for the parking of the cars, (Reilly, 2013).
The company should reduce the promotion package from 53 euros to a value that if deducted would meet the cost of paying for workers parking. This is because the company is not reasonable giving a promotion of 53 euros and not able to meet the cost of the car park for workers. By estimating that each worker should pay 1 to 2 euros, the implication is that the cost is low. This cost to meet parking fee can be sourced by reducing the promotion package to customers. They should understand that workers are very important and are the one behind the 24.3 share of the market because they attend to them nicely. If the workers were not good attenders to customers, the 24.3 per cent market share would not be associated with Dunnes Stores but a rival store. In addition, the company should recognize that some workers come from remote places and thus they would reach the work place when already tired and this would make them not work, (Reilly, 2013).
As a recommendation, Dunnes Store should consider buying a staff bus that can ferry workers back to their homes. The company can then train one worker who will be working half day, and then he or she prepares to ferry workers back to their homes. This will save the company money that will be used to pay a driver. The other recommendation that can be made to Dunnes store is that the management can consider hiring a public transport bus, instead of buying a staff bus. This public transport bus will have to agree with the worker on the best time they can be picking the workers from the stores compound. Comparing these two options, it is clear that hiring a public transport bus is the best option instead of buying a new bus and the additional cost of hiring a driver, (Reilly, 2013). If the second recommendation is implemented, the workers will be comfortable to work for Dunnes store.
In conclusion, this paper has described Dunnes retail shop and the market share it commands. The paper has then identified the two problems that are facing the store. The first is that it is losing a lot of money promoting customers. The second is that it is in a dilemma whether to charge workers 1 to 2 euros for car park cost. The company is not justified to implement these charges because it can reduce the promotion package to pay for workers car park. Finally, the paper recommends the company to buy a staff bus to ferry workers back to their homes at designated time.
References
Brophy, D. ( 2013) ‘ Workers slam ‘inconsiderable’ Dunnes over withdrawal of staff parking spaces’ Business etc,. [Online]. Available from: businessetc.thejournal.ie/dunes-parking-mandate-1180895-Nov2013/ [Accessed 29/11/13]Reilly, G. (2013) ‘SIPTU to seek pay increase for retailer workers after dunes deal’ Business ect,. [Online]. Available from: businessetc.thejournal.ie/siptu-retail-pay-campaign-759658-Jan2013/ [Accessed 29/11/13]Reilly, G. (2013) ‘Dunnes and Aldi make biggest gains in Christmas grocery market’ Business etc,. [Online]. Available from: businessetc.thejournal.ie/dunnes-and-aldi-increase-share-753750-Jan2013/ [Accessed 25/11/13]Reilly, G. (2012) ‘Tesco extends lead as Irelands most popular supermarket’ Business ect,. [Online]. Available from: businessetc.thejournal.ie/supermarket-shares-tesco-aldi-636351-Oct2012/ [Accessed 29/11/13] Reilly, G. (2012) ‘ Discount German supermarkets increase of grocery markets’ Business ect,. [Online]. Available from: businessetc.thejournal.ie/discount-german-supermarkets-inrease-share-of-grocery-market-374749-Mar2012/ [Accessed 29/11/13]Central Statistics Office (2013) ‘Population and migration estimates.’ [Online]. Central Statistics Office. Available from: www.cso.ie/releasesandpublications/er/pme/populationandmigrationestimatesapril2013/#.UpjlfCfk-w0 [Accessed 29/11/13]
