Grocery market suffers first dip

IRELAND’S grocery market has contracted for the first time since August 2010, as prices continue to rise and discounters Aldi and Lidl continue to make inroads.

The latest grocery market figures from Kantar Worldpanel in Ireland, show that the grocery market has fallen in value by 0.5% when compared to the same period last year. Grocery inflation is at 2.5% for the 12-weeks ending September 4, down from 4.4% in the previous period.

However, the shrinking market is posing no obstacle to Aldi and Lidl, which continue to record significant quarterly gains, with Aldi increasing its market share by 25% and Lidl up by 6.5%.

The commercial director at Kantar Worldpanel, David Berry, said: “One of the most notable trends emerging this month is a clear gap between the performance of the multiple retailers and the convenience and specialist channels.

“Each of the major retailers have placed further emphasis on the value they offer in store and this, combined with a ‘back to school’ push, has succeeded in switching sales away from smaller outlets.”

The Tesco juggernaut continues as it retains and expands its market leadership position, growing ahead of the market and maintaining a five-share point lead over nearest rival Dunnes Stores.

“Aldi’s strong growth derives from being the only retailer to perform positively in all areas — it has more customers and these customers are shopping more often and spending more each visit. Aldi recently announced its intention to open six new outlets before the end of the year, meaning this trend is likely to continue, as more shoppers become within reach of an Aldi store,” Mr Berry said.

Kantar said its inflation figure is based on over 75,000 identical products compared year-on-year in the proportions purchased by Irish shoppers and “therefore represents the most authoritative figure currently available”.

* Dunnes Stores has head-hunted head of clothing at Tesco Ireland and Britain, Richard Jones. He joined Tesco in March 2010, from J Sainsbury, where he was head of non-food, to re-invent Tesco’s clothing business.