Grocery price inflation falls to a near two-year low

Annual grocery price inflation declined for the 10th month straight. 

Irish grocery price inflation dropped below 5% during February with inflation at its lowest levels in nearly two years, new data shows.

According to the market research firm Kantar, annual grocery price inflation now stands at 4.7% dropping 1.2% from January — marking the 10th straight month of declines.

Business Development Director at Kantar, Emer Healy, said inflation levels have now reached their lowest since April 2022 with a gradual decline expected to continue throughout the rest of the year.

Despite the levels of inflation reducing, consumers are continuing to manage their household budgets with own-label goods continuing to grow strongly.

“We saw this behaviour over the course of 2023 and it’s clear to see this is now a more established norm for shoppers into 2024,” Ms Healy said.

Own-label goods now hold 46% market share with sales growing 7.5% year-on-year, with shoppers spending an additional €112m year-on-year. Premium own-label ranges are performing strongly with shoppers spending an additional €19m on these lines, a 12.5% increase compared to this time last year.

Sales of brand goods were also up 4.7% over the 12 weeks to February 18.

In the aftermath of Christmas, promotional levels increased leading to 27% of all consumer spend in the 12 weeks to February 18 being on promotional items, which is up 3.9% compared to last year.

Dunnes, Tesco, Aldi and Lidl all saw strong growth in sales on promotion ahead of the rest of the market.

Valentine’s Day also impacted the purchases of many Irish consumers with 58% buying boxed and gifting chocolates.

“We saw volumes of boxed and gifting chocolates up 3.7%, with shoppers spending an additional €1.7 million year-on-year. Shoppers spent an additional €4.3 million on chilled ready meals, €1.8 million on chilled desserts and €916k on sparkling wine,” Ms Healy added.

Pancake Tuesday also saw an additional €2m spent on flour, eggs and chocolate spread.

In terms of consumer spend amongst the main supermarket chains, Dunnes Stores had the highest share at 24.3% while Tesco held 23.5%. SuperValu held 20.6% of consumer spend while Lidl and Aldi held 12.8% and 10.9% respectively.

Aldi suffered the largest drop in consumer spending falling from 1.7% compared to last year.