Grocery spending rises despite tighter prices

Shoppers have continued to spend more at supermarket tills even with an easing in price reductions, new figures show.

Grocery spending rises despite tighter prices

Latest data from consumer insights agency Kantar Worldpanel covering the 12 weeks to early October show an easing in standard grocery price deflation, with prices falling 0.1% in the period compared to a 0.4% fall in the preceding quarter.

Nevertheless, shopper spending continued to rise with a 2.1% year-on-year increase noted for the period. In the 12 weeks to October 8 consumers spent more than €2.37bn on groceries across the five main players.

Recent CSO figures showed the annual inflation rate eased to 0.2% in September from a four-month high of 0.4% in August; adding that food prices fell due to lower prices across a range of products including soft drinks, vegetables, bread and cereals.

An upsurge in the purchase of branded goods (as opposed to own label goods) was also noted in the latest Kantar figures.

“With the recent trend towards own-label items, there’s now some good news on the horizon for brands,” said Kantar director David Berry. “This time last year sales of branded items dropped by 0.5% compared to the year before. However, we’re now seeing a return to form, with sales up 1.3%,” he said.

“At Christmas, shoppers tend to flock back to brands — partly for sentimental reasons and also as people are tempted to trade up at this time of year.

“So, with the countdown to the festive season now well and truly underway, it’s likely we’ll see this trend continue into the new year,” he said.

Kantar said it has seen no significant shifts in cross-border shopping migration from the Republic to the North in recent months.

Meanwhile, the latest period was also notable for Tesco’s continuing recovery. It is now equal with SuperValu in terms of market share with each controlling 22% of the market.

Tesco also comfortably racked up the best sales growth levels in the latest quarter, with over-the-counter sales up 4.2% on a year-on-year basis.

“SuperValu, in comparison, only saw a 0.5% growth in sales.

“Both retailers have benefited from customers spending more each time they shop.

“Though SuperValu has seen consumers spend an additional 40c per basket on average, Tesco has encouraged its shoppers to add an extra €1 to every shop,” said Mr Berry.

As for the other main players, Dunnes benefited from a 1.7% jump in sales and boosted its market share to 21.9%. German discounters Lidl and Aldi currently control 11.7% and 11.6% of the market, with both seeing recent sales growth of around 3%.

“With Dunnes only 0.1 percentage points behind SuperValu and Tesco, the top three Irish supermarkets are all fighting for the top spot.

“With the festive period just around the corner — the time of year when sales spike and shoppers aren’t afraid to spend that little bit extra — the competition shows no signs of abating,” said Mr Berry.

Earlier this month, Kantar’s grocery market figures for the UK saw market share falls for the big four players there — Tesco, Morrisons, Sainsbury and Asda — while Lidl and Aldi continued to make up ground on the mainstream competition.

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