Grocery price inflation still running at over 16%

Retail inflation the 'real driving factor' behind increased spending in Irish supermarkets rather than increased purchasing

Spending in supermarkets is up €574m but this is being driven by inflation rather than Irish people buying more. 

Grocery prices inflation is still running in excess of 16%, despite a slight dip in May, continuing to heap further pressure on households, new figures show.

The figures were released by market consultants Kantar, which said inflation was the “real driving factor” behind increased spending in Irish supermarkets rather than increased purchasing. 

In the 12 weeks to May 14, an additional €574m was spent in supermarkets compared to the same period last year — up 11.8%. During that time, grocery price inflation was running at 16.5% — down just 0.1% from April.

Emer Healy, retail analyst at Kantar, said despite the slight drop, inflation was still high, with 16.5% rate representing the “the third fastest rate of grocery inflation we’ve seen since 2008”.

In response to the high level of inflation, we are seeing consumers change their shopping patterns to off-set part of the increased cost.” 

According to Kantar, Irish shoppers are turning to shopping little and often to help manage their household budgets. In the three months up to May 14, visits to supermarkets were up 12% — equating to seven additional trips.

Supermarket own-label products continue to prove popular with households looking to manage their money better. Sales of these products rose 16.3% compared to the 8.2% increase for branded items.

Own-label sales grew 32.3% year-on-year growth, equating to €17.5m more being spent on these ranges. 

Kantar said May marks the first time it had seen branded and own-label items on equal terms when it comes to market share, with each holding a 47.3% share of the market.

The company said this was a “sign that the hunt for the best value in the market continues”.

Online sales remain positive, up 3.3% year-on-year, with shoppers spending an additional €5.3m online, however, volume sales online are down 16.3% compared to last year.

As May marked the start of the summer months, Irish households started spending more on the summer essentials.

Ms Healy said “barbeque season has officially started”, with shoppers spending €6.6m more on beer and lager in May, €722,000 more on chilled burgers, as well as €516,000 on fresh sausages.

Dunnes Stores remains the top destination for people to do their grocery shopping, accounting for 23.1% of the total spend, followed by Tesco at 22.4% and SuperValu at 20.6%.

Lidl and Aldi account for 13.6% and 12.1% respectively.

Supermarkets are also benefiting from more frequent trips by consumers. SuperValu shoppers make the most trips in store compared to all retailers, with an average of 23.8 trips, an increase of 15.4% year-on-year.

Dunnes Stores is seeing an increase of 14% — equating to nearly two additional trips — on the number of trips people make to their stores while Tesco has a 16% growth rate in this area.

For its research, Kantar tracks prices of 30,000 identical products sold in Irish supermarkets.