Festive staples drop in price

Fierce competition in the run-up to Christmas has led to grocery price inflation falling to 1.9%, meaning that the staple food items for this time of year are costing less than 12 months ago.

The 1.9% figure — which covers the 12 weeks to the end of the first week of December — compares to a level of 2.6% for the preceding three months.

In its latest set of data for the high street grocery sector, consumer insights agency Kantar Worldpanel noted that competition among the leading players has tightened as the festive season approaches.

“In a bid to emerge victorious over the all-important Christmas period, competitive pricing among the retailers has led to inflation dropping to just 1.9%. Shoppers are reaping the benefits, with staple items such as vegetables, eggs, and bread costing less this year compared with last — meaning savings on Christmas dinner purchases,” according to David Berry, Kantar’s commercial director.

Overall grocery sales were up 0.7% in the period, on a year-on-year basis, following a 1.1% growth level in the preceding period.

While the previous study showed only Tesco losing sales at the till, the December survey shows that the UK multiple’s Irish operation (which has seen a fresh annualised 3% fall in over-the-counter sales this period) joined by Dunnes Stores, whose sales dipped by 1.6%.

SuperValu’s till sales grew marginally by 0.2% year-on-year during the 12 weeks.

Dunnes’ sales drop was only its second since returning to growth in May, while SuperValu’s slight lift mainly came from customer expansion in Munster and Connacht.

Meanwhile, the German discounters now have a combined 16.2% share of the Irish grocery market, and grew combined sales in the latest review period by nearly 15%.

Only 1.5% separates the top three, in market share terms, with Tesco at 25%, SuperValu at 24.5%, and Dunnes at 23.5%.

“Lidl and Aldi have each enjoyed strong sales growth throughout 2014. It seems likely that they will maintain this streak over the festive period, which will top off what has been a stellar year for the German retailers,” according to Mr Berry.

“Despite a 3% dip in sales, Tesco remains Ireland’s leading supermarket, benefitting from a slight increase in footfall to their stores of 18,000 shoppers.

The challenge now facing the retailer is encouraging shoppers to buy more at the tills.”