Lidl shines in the absence of shopper exodus in Brexit aftermath

Lidl has emerged as one of the big beneficiaries from the much-threatened cross-border shopping exodus failing to materialise in the Irish grocery market in the aftermath of the recent Brexit vote.

As sterling weakened, in the aftermath of the UK’s June vote in favour of leaving the EU, many predicted a return to recession-era trends of shoppers in the Republic heading to the North to do their grocery shop and avail of cheaper prices.

In its July Irish grocery market update, consumer insights agency Kantar Worldpanel noted a marginal - 0.3% - contribution from such behaviour to overall grocery sales on the island of Ireland since the Brexit vote.

However, it suggested cross-border shopping could become more pronounced as the summer progressed.

Kantar’s research since then hasn’t borne out that fear; with figures actually showing the opposite – grocery sales in the Republic continuing to grow strongly.

Kantar’s director in Ireland, David Berry, said yesterday shoppers in the Republic are seemingly happy with the value they are finding.

He added Kantar does not expect to see anything like the kind of rush for the border for cheaper priced groceries that was so evident before the financial downturn.

“Over recent months the price of groceries has increased slightly, with an average basket now costing 2.7% more than this time last year. Areas where we have seen the most significant increases include vegetables, fruit, and beer – all major categories for the retailers,” he said.

Kantar’s latest Irish market figures – published yesterday and covering the 12 weeks to August 14 – show a 3.5%, year-on-year, increase in combined sales.

The real change in consumer behaviour, this summer, has been – rather than the feared move North - a move away from the mainstream leaders towards the discounters like Iceland, Aldi and Lidl.

And, while SuperValu maintained its market leading position for an 11th straight month – with a market share of 22.6% and a 3.2% increase in over-the-counter sales – it was Lidl that shone more than most, reaching a record market share position of 11.9%.

Dunnes, Lidl and Aldi were the only three whose till sales grew ahead of the market in the latest 12-week review period.

“Lidl is reaping the rewards of recruiting 34,000 new shoppers during the past 12 weeks,” said Mr Berry; while JP Scally – managing director of Lidl Ireland – said the expansion of the retailer’s summer range has proved “extremely popular”.

He added that the recently announced 600 new jobs, due to come on stream over the next two years, will support Lidl’s continued Irish expansion.

Aldi’s recent performance also impressed. Sales were ahead by 4.4% in the past 12 weeks, with its market share now at 11.3%.

It has recovered strongly since seeing a significant sales dip earlier in the year. Tesco Ireland, meanwhile, remains the only one of the big grocery players to see its till sales remain in negative territory – down 1.7% in the last quarter.

Tesco now controls 21.8% of the Irish market, down from nearly 23% at this stage last year.

While the smaller players are continuing to make inroads, SuperValu did see an additional 15,000 households shop with it in the latest review period. Meanwhile, grocery market inflation stood at 2.7% in the 12-week period.


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