SuperValu gains edge as grocery prices drop

SuperValu has gained an edge over its supermarket rivals just as the grocery market has slipped into deflation for the first time in two years.

Data from consumer insights agency Kantar Worldpanel covering the 12 weeks to March 26 show that grocery prices fell for the first time since 2015.

For the period under review Kantar said grocery market inflation stood at -0.2%; down from 0.5%. However, it said, this might not lead to consumers buying and spending more at the tills, with deflation being cited as one of the main reasons for the recent slowing in grocery sales growth.

“Only now are we starting to feel the effect of the weakened pound following the EU referendum, as the price of British imports drops,” said Kantar World-panel director David Berry.

“For the first time since May 2015 grocery prices are falling, so consumers are likely to have a little extra cash to hand, though this doesn’t necessarily mean they’ll spend more in store.

“Many will see the break from inflation as a chance to cut down their grocery costs and pocket the savings instead,” he said.

Kantar’s latest review of the grocery market also shows a significant rise in the sale of own-label lines. These now account for 54% of grocery spending, an increase of 6% over the past four years.

“SuperValu and Tesco have both responded and expanded their own-label ranges. The retailers see this as a real opportunity for growth, with own-label lines offering them the chance to set themselves apart from the rest,” said Mr Berry.

However, name brands are still dominating in Dunnes with own-label lines accounting for just 38% of its sales and that representing only 1% growth since 2013, which is much lower than at the other main players.

In terms of how the individual players are performing, SuperValu has returned to the top spot, commanding 22.6% market share, despite its over-the-counter sales falling by 1.4% year-on-year in the 12-week period.

However, the Musgrave-owned supermarket chain’s return to the top spot had more to do with rivals losing share than it upping its own market share. Dunnes, which had been market leader in recent times, saw its annualised market share dip from 22.9% to 22.3% in the latest reading, while Tesco Ireland’s share fell marginally to 21.2%.

However, of the big three, Dunnes was the only one to see positive movement at the tills, with sales up 3.2%. Tesco’s till sales fell 3.8% in the latest quarter, when measured year-on-year.

Both German discounters did well. Lidl sales rose 3.7% and Aldi had a 5% sales boost. On a combined basis, the two now control just under 23% of the grocery market.

British frozen food retailer Iceland yesterday announced the latest phase of its expansion in Ireland, four years since returning to the market.

A €12m investment will see it open nine more stores in Dublin, Cork, Clare, Galway, Donegal, Limerick and Wexford and more than double its Irish workforce with the creation of 270 jobs.

Three of the stores will be based in Cork— at Douglas, Fermoy, and Ballincollig.

Only the Douglas one has an opening date — pencilled in for June of this year — planned to date.

After the openings, Iceland will operate 22 stores in the Republic.


Lifestyle

Here’s how new parents can get more sleep, according to a Hollywood nanny

Everything you need to know about Binyavanga Wainaina’s work, as the Kenyan author dies

6 greener straws and stirrers for your drinks, as plastic versions are set to be band

These are the signs and symptoms of sepsis to be aware of

More From The Irish Examiner