Grocery sales up, but sterling threat looms

The Irish grocery market has continued its solid growth in recent weeks, but the lure of potentially cheaper goods in the North — as sterling continues to weaken — is being viewed as a real threat.

New figures from consumer insights agency Kantar Worldpanel – for the 12 weeks to June 19 – show grocery market sales in the Republic grew by 2.5%, year-on-year, with all major players except Tesco Ireland noting a boost at the tills.

However, Kantar’s insight director Georgieann Harrington said “a level of uncertainty” has been cast over the sector since the recent Brexit vote, with cross-border shopping “potentially” set to increase.

“While the grocery market is in growth, the landscape remains competitive. 

"With the recent EU referendum result and the weakening of the pound against the euro, it could be that we see Irish shoppers return to old habits. 

"During the recession many headed across the border in search of better value at UK retailers in the North. 

"Cross-border shopping only accounted for 0.3% of Irish grocery sales in the latest 12-week period, but at the peak of the recession this stood at 4.1%,” she said.

While the 0.3% figure may be minimal, Kantar said its next market share survey, due next month, could be more telling.

“Shoppers’ main interest is value and they will shop with whoever provides it the most,” Ms. Harrington added. 

"Average grocery spend per household has increased by €27 this year, with higher prices paying a small part but an increased number of shopping trips the main reason. 

"The average household has made 62 visits on average over the past 12 weeks, compared with 58 trips last year. 

"With the number of items per basket also falling, we’re seeing a return to the tendency to shop little and often,” said Ms. Harrington.

In terms of who benefited from that, in the most recent 12-week period, Dunnes saw a near 6% rise at the tills, with Lidl not far behind with a 5.8% sales rise. 

Tesco Ireland was the only player to see sales fall during the period, with a 2.7% decline.

In market share terms, SuperValu extended its lead; with it now holding a 22.6% share. 

Tesco currently holds a 22% share, Dunnes is at 21.4% and the German discounters control a combined 22.8% of the market.

Dunnes has attracted an extra 13,000 shoppers this year, with average spend per shopper increasing by nearly €20. 

SuperValu’s ongoing success has been attributed to it persuading the average shopper to spend an extra €14 per trip.

While Tesco’s sales are down, the number of shopper visits to its stores are marginally up.


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