Focus on price helps multiples increase grocery market dominance

MULTIPLE retailers now occupy an 88% share of the Irish grocery market, a 1.7% increase driven by the consumer’s focus on price, according to Kantar Worldpanel.

Retail market research specialist Kantar also noted that the overall Irish market remains subdued, with value sales falling marginally in the latest quarter compared to this time last year. It says this is mainly due to shoppers trading down to cheaper products and spending less money on each trip.

Spend per household is almost static compared to last year, with shoppers still making one more trip this quarter, but spending on average 50c less per visit.

Kantar Worldpanel Ireland commercial director David Berry said: “Those retailers who have been able to convince shoppers they offer value are the ones winning share in the market. Aldi, Lidl and Tesco have clear low-price messages which have resonated with shoppers, shown by their current respective growth rates of 26%, 5% and 3%.”

The gap between inflation and growth continues to be a major feature of the market as hard-pressed shoppers move to cheaper products to combat price rises. Retailers are reacting by introducing new ways for their customers to save such as promotional offers in store, vouchers and expanding their range of own-label products.

“The impact of this activity can be seen through a widening gap in performance between the multiple retailers and the smaller outlets. The multiples have grown sales by 1.7%, with their share of the market reaching a record high of 87.7% this month,” said Mr Berry.

“However, the smaller stores have seen their share decline to 12.3%, as they struggle to match the cost-saving measures and the new store openings of the multiples,” he added.

Dunnes Stores increased its share growth by 0.8% in the quarter to 23.9%, the highest level of market share since March 2010.

The discounters’ market share of the grocery market stands at 10.8% in value terms and 15.6% of all packs purchased. Between them they have attracted 1.21 million households in the latest quarter, up 40,000 on 2010.

Bord Bia retail analyst Gillian Swaine said: “The figures for the multiple retailers have always been quite high in the Irish market. For consumers, the focus is a strong focus on value playing out in the market.

“Even the small groups and independent outlets are trying to get their value message out there. For consumers, there is easy access to information on price, from in-store to media advertising and via mobile apps. The infor-mation is coming at them from all angles, which has played a part in increasing the focus on price and value for money,” she said.

Grocery inflation is at 3.2% for the 12 weeks ending October 30, up from 2.8% in the previous period. This figure is based on 75,000 identical products compared year-on-year in the proportions purchased by Irish shoppers.