Irish grocery prices fell steeply helping to encourage shoppers to spend €2.34bn at the tills over recent months, according to a leading market researcher.
Kantar Worldpanel Ireland said the price of its basket of 30,000 standard grocery items in the 12 weeks to mid-July dropped 0.5% from the same period last year.
The 0.5% deflation compares with an inflation rate of 2.6% a year ago, the research firm said. Falling prices helped boost spending in the period to €2.34bn, an increase of €45m in the year.
The 14% slump in the value of the sterling against the euro since the UK voted for Brexit last summer should lead to sharp falls in the prices of many Irish grocery items because so many supermarket items here are imported from across the Irish Sea.
Given the unprecedented scale of the currency boost, leading economist Jim Power has in recent weeks said the drop in retail prices should probably be even steeper. CSO figures from its consumer price index show food prices fell by an average 2.6% in June from a year earlier, with flour and pasta and cereal items dropping by up to 5%.
The Kantar survey also showed a narrowing in the market shares of the three largest chains — SuperValu, Tesco and Dunnes Stores.
With a share of 22.1%, SuperValu kept its No. 1 position but dropped a part of its previous lead over a resurgent Tesco, which grew sales to secure its 21.9% share of the market.
In turn, Tesco now only has a slight lead over Dunnes, which despite putting on a growth spurt remained in third place, with a share of 21.5%.
Lidl and Aldi lagged behind but with respective shares of 12.1% and 11.4%, the rival German discounters together have the single largest share of the Republic’s grocery spend.
Kantar said despite its “pure inflation measure”, shoppers could secure even lower prices by trading down or seeking out special offers.
The researcher’s Cora Campbell said that as prices fell shoppers were spending more.
“Shoppers continue to favour retailers’ own brands, with sales growing by 3.7% and accounting for 55% of total grocery spending over the past 12 weeks,” she said.
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