Irish grocery spending falls as inflation hits near two-year high

Consumers are spending less on their supermarket trips as grocery inflation continues to surge. A change in shopping habits has also seen a price-conscious move to own label brands.

The prices of everyday grocery items have hit their highest levels since the early days of the Covid crisis, prompting consumers to spend less on their supermarket shop and alter their buying habits.

Inflation has hit grocery shelves for seven consecutive months now, according to the latest data from retail analysis company Kantar. Grocery price inflation was 2.4% in the 12 weeks to February 20, when compared to the same period a year earlier, Kantar said. That was the highest level since June 2020.

As a result, grocery sales declined by 4.5% over the 12 weeks, with online grocery sales falling by 15% year-on-year as shoppers returned to physical stores. Nevertheless, overall grocery sales remain more than 11% higher than two years ago before the pandemic took hold.

“Prices are rising across the board and that’s really being felt at the grocery tills. We’re now starting to see this reflected in shopper behaviour, with people increasingly opting for private label lines over branded products in an attempt to drive down the cost of their weekly shop,” said Emer Healy, senior retail analyst at Kantar.

The average spend per grocery shopping trip, over the four weeks to February 20, was €27.02.  That was down by more than 5% compared to the same period last year, Kantar said.

As #inflation rises and #promotions decline, find out how #Irish #shoppers are responding, in our latest Irish #GroceryMarketShare release: https://t.co/Xi14dHInYU

— Kantar UK & Ireland (@Kantar_UKI) March 7, 2022

Ms Healy noted the response by supermarkets to the growing cost of living concerns through an increase in targeted advertising and voucher schemes. "These kinds of tactics will only become more important as grocers battle for the biggest slice of consumer spend in a challenging environment," she said.

The further loosening of Covid restrictions during February also contributed to the overall fall in supermarket sales as people started returning to offices and city centres.

All major players saw some level of sales decline over the most recent period, but Dunnes retained its leading position with a 23% share of the Irish grocery market, followed by SuperValu with a 22% share and Tesco with a 21.9% share.

Lidl and Aldi also gained market share over the past 12 weeks, now accounting for 12.2% and 11.7% of the market respectively. All grocers saw an increase in sales compared to the same period two years ago.