Consumer spend rise drives supermarket sales

Irish consumers’ grocery shopping spend rose by 3.6% over the past 12 weeks — despite rising prices — providing further evidence that household finances are strengthening.

Latest data from consumer insights agency, Kantar Worldpanel — covering the period to March 1 — proves shopper spend has grown by over 3% in each of the last three 12-week reporting periods.

“The latest supermarket share figures show the strong start to 2016 has continued for the supermarket sector.

"Shopper spend has increased by 3.6%... making this the third successive period where growth has been above 3% for the Irish grocery market.

“Over the past 12 months we have seen a gradual increase in the level of price inflation, increasing from slight deflation of -0.1% in March 2015 to inflation of 2.6% in the past 12 weeks.

"Interestingly, shoppers don’t seem deterred by rising prices, increasing their spending well ahead of the rate of inflation,” according to Kantar director, David Berry.

One of the major beneficiaries of that trend has been Dunnes Stores.

Over the course of the latest 12-week survey period, Dunnes upped its over-the-counter sales by 7% on a year-on-year basis with its market share stable at 24.1%.

The company’s grocery sales increased by nearly €3m per week in the past quarter.

“Bigger baskets remain the primary driver of growth for Dunnes, the average shopping trip now coming to €37.60, almost €2.50 higher than last year,” Mr Berry said.

SuperValu remained the leading Irish grocer during the period with a 25% share of the market and a 3.7% annualised sales increase, while Tesco hung onto its 24.2% share of the market and saw its till sales increase 0.6%. Said Mr Berry: “This is the third successive period of growth for Tesco and has been driven by more frequent visits — each shopper visited the retailer 14 times on average over the past quarter compared with 13 visits last year.”

The German discounters also maintained their strong showing with a combined 6.7% annualised sales increase. Between them, Lidl and Aldi now control 16.2% of the market.

Aldi’s sales rose by 3% in the past three months, with Lidl’s rising by 10.6%, comfortably giving it the best sales improvement of all retailers.

“Over 66% of Irish households shopped in a Lidl store in the past 12 weeks, compared with less than 60% five years ago.

"Aldi’s growth is more modest but remains impressive, with larger shopping trips increasing sales by 3%,” said Mr Berry.

He also offered an insight into changing buying trends: “There are signs that the Irish public may be sticking to their new year’s resolutions, with healthy foods performing well ahead of the market.

"Sales of fresh fish increased by 13% in the past 12 weeks, while fruit saw an 11% boost and sales of nuts have increased by 17% compared with last year.

"However, we’re still looking to treat ourselves too — sales of chocolate confectionery were up 14% this quarter, while ice cream saw a 13% sales increase compared to the same period last year.”

Latest consumer senti ment data showed a marginal dip in mood in February linked to a drop in positivity regarding household finances.

That said, the findings, according to survey authors KBC Bank Ireland and the ESRI, did not signify any major loss of confidence among consumers.