Grocery wars to control price growth

Consumers are set to benefit further as tightening competition in the grocery sector is set to keep a lid on rising prices.

Latest figures from consumer insights agency Kantar Worldpanel show that combined year-on-year grocery sales growth dipped by 1.6% — to 3% — in the 12 weeks to January 29, heightening competition among the main players.

“The slowdown in overall market growth has led to even stronger competition between the major supermarkets and it’s right at the top of the market share table — only 0.3 percentage points separate Dunnes Stores, SuperValu and Tesco.

"This points to a good year for consumers as the retailers battle each other fiercely for their all-important grocery spend, keeping price inflation low,” said Kantar director David Berry.

“Grocery prices are only 0.7% higher than they were this time last year — which for the average shopper only amounts to an extra 17c per trip,” he added.

Kantar seems to have been proven right in forecasting that the recent weakness in sterling against the euro would not be enough to prompt shoppers to head to the North in search of cheaper groceries, but supply problems affecting fresh produce has played a huge part in dampening sales.

“Southern Europe might be suffering from continuing rainfall but it’s having a substantial impact on Irish shopping baskets. Courgettes, cauliflower and spinach have all seen volume sales drop by at least 20% while a host of other categories including lettuce and cabbages have been affected to a lesser degree,” said Mr Berry.

Regarding market share, Dunnes Stores returned to top spot with 22.7%. SuperValu and Tesco are second and third, with 22.5% and 22.4% of the market, respectively. SuperValu was the only player to see negative sales, with a 0.4% drop noted. However, Dunnes’ 3.6% increase in over-the-counter sales marked its weakest level of sales growth in over a year.

The lure of the German discounters also remains strong. Nearly three-quarters of Irish shoppers visited a Lidl store in the latest 12-week period under review, bringing 26,000 more shoppers through its doors and boosting sales by 2.8% year-on-year. Lidl now has a 10.3% share of the Irish market.

Its compatriot Aldi has a 10.6% share and with recent sales growth of 6.3% has cemented its position as Ireland’s fastest growing grocery retailer.

Shoppers are now visiting Aldi 8.7 times every 12 weeks, according to Kantar. This compares to 8.1 times for the same period last year.

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