Shoppers cash in on all-out grocery price war

Consumers are the big winners in a price war between the supermarket giants, with staple grocery items such as milk, bread and vegetables costing up to 10% less than a year ago.

Food and drink prices are rising at the lowest level since March 2012, with grocery price inflation for the 12 weeks to August 17 at 1.5%, down from 1.9% in the last period. Last year, consumers were paying an average of €1.67 per kilo of vegetables. That has now fallen to €1.52 per kilo.

David Berry, commercial director of Kantar Worldpanel, which compiles data on supermarket share, said the price war is set to continue. Lidl and Aldi now have 17% of the market, at the expense of Tesco. The data shows 65% of households shopped in Lidl stores over the past 12 weeks, 46,000 more than this time last year.

That boosted the German discounter’s share of the Irish market to a record level of 8.5%. Furthermore, the company saw an annualised sales increase of 11.5% for the period up to August 17.

The other German discounter, Aldi, saw a 14.4% year-on-year jump in over-the-counter sales, while its market share grew to 8.4%. While Aldi’s sales growth has slowed, it is still increasing ahead of market average. The two German grocers now have a 17% share of the Irish market.

Dunnes, which has been helped by its use of branded and rounded-up euro promotions, was again the best performer outside of the discounters. Till sales were up by 0.3%, year-on-year, for the period; while its market share remained steady at 21%.

SuperValu also kept its market share relatively stable, at 25%, but saw a 0.4% dip in over-the-counter sales. Tesco Ireland, meanwhile, saw a 5.5% sales decline and a near 2% drop in market share to 25.4%. Tesco has seen its market share drop to 25.4% from 27% in the same period last year and sales fall by 5.5%.

Irish Farmers Association president Eddie Downey said primary producers remain under intense pressure because of rising input costs and price cuts. He said livestock farmers in particular felt betrayed by the “unacceptable behaviour and lack of corporate responsibility on the part of the powerful retailers and meat factories to their farmer suppliers”.

Mr Downey warned all of the major retailers and factories that the anger and frustration of farmers was at boiling point and the “unjustified” price and specification cuts, which were severely damaging farmers and the Irish beef sector, must be reversed.

“IFA’s position has always been that an independent ombudsman should be appointed by the Government, similar to the Groceries Code Adjudicator in the UK, to oversee and implement this legislation,” said Mr Downey. “IFA is concerned that the proposed new Authority [Competition and Consumer Protection Commission], will not be sufficiently independent to provide anonymity and confidentiality to suppliers and this will deter them from making complaints and disclosures.”

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