Latest grocery data from Kantar shows warmer weather in Ireland drove spending in the grocery sector last month at a time when rising prices are influencing both the sales performance of the leading retailers and consumer behaviour.
Take-home value sales over the four weeks to 18 May increased by 6.6% compared to the same period last year. Shoppers in the country visited stores an average of 22.3 times, contributing an additional €17m to the market’s overall performance.
Grocery price inflation in Ireland currently stands at 4.96% compared to the same 12-week period last year. The figure has increased 2.4 percentage points since the same time last year, with Emer Healy, Business Development Director at Kantar, commenting: “Although households have been adjusting their spending for some time now, what we’re seeing is a clear ‘tipping point’ when inflation goes above 3% to 4%. This is when shoppers really start to feel it in their wallets, and they change their behaviour.
“As a result, supermarkets are having to be more creative in the way they attract shoppers in-store and online – offering quality products at the right price.”
Kantar’s data shows shoppers spent an additional €124m on promotional lines over the last 12 weeks compared to the same period last year, with the share of packs on promotion standing at over 22% – the highest level since May 2021. While the total promotional market grew by 17.6%, key categories, including table sauces, skin care, deodorant, soft drinks, frozen confectionery and chocolate, all grew ahead of this with double-digit growth.
Despite the added pressure on household budgets, Irish shoppers continue to prioritise quality. This is evident with both brands and own label performing strongly – up 5.6% and 5.2% respectively – with shoppers spending an additional €174m on these ranges compared to last year.
Brands still hold a higher value share of the total market in Ireland at 47.4%, compared to own label with 47.1% value share. With double-digit growth (+12.6%) over the 12 weeks, premium own label continues to grow faster than the market as a whole (+6.1%). Premium own label currently holds 4.1% value share of the total market compared to 3.9% last year.
Meanwhile, with a warm and sunny start to May, shoppers spent an additional €14m on typical summer fare, including sausages, coleslaw, antipasti, potato salad, non-alcoholic drinks, mixers, pickles, beer & cider and ice cream. An additional €50,000 was also spent on suncare products compared to this time last year.
Online held a 6% value share of the market with sales rising by 8% year-on-year after shoppers spent an additional €15.9m through this channel. Over the 12-week period, shoppers purchased their groceries more often online, up by 10.4%, contributing €20.3m to its overall performance.
Looking at the performance of individual retailers, Dunnes held 23.8% of the market after seeing its sales grow 7.2% year-on-year. Dunnes shoppers picked up more volume per trip, up 0.7%, alongside making more frequent trips, up 1.8%, which contributed a combined €20.2m to its overall performance.
Tesco controlled 23.3% of the market, with value growth of 7.1%. Shoppers increased their trips to its stores by 5.3%, which contributed €41.3m to overall performance.
SuperValu held 20.3% of the market with growth of 5.4%. Consumers made the most shopping trips to this grocer, averaging 24.9 trips over the 12 weeks, helping to contribute an additional €38.9m to its performance.
Meanwhile, with shoppers being squeezed by rising grocery inflation, the discounters performed well. Lidl saw its sales climb 6.3%, with larger trips driving an additional €12.9m in sales. Aldi increased its market share to 11.7% after seeing growth of 6.8%. Increased trips to its store and new shoppers drove an additional €24.2m in sales.
NAM Implications:
- A good weather boost helps motivate suppliers, retailers and consumers.
- But breaching the 3-4% inflation tipping point reminds not only the cash-strapped consumers of the real world…
- …causing retailers that can, to play via quality & price in maintaining appeal.
- While brands and own label are holding their shares…
- …any move of inflation above 5% could tip in favour of premium own label.
- All told, the discounters have an edge, especially going forward…
