Grocery landscape vastly different to just 5 years ago

Shopping for groceries may seem like an ordinary task of day-to-day life, but how and where we shop, as well as what we choose to buy, is changing.

The grocery landscape is vastly different to what it was five years ago, as shoppers broaden their horizons and break well-worn habits.

Collectively the big three are continuing to lose share of the market as Aldi and Lidl continue to grow in popularity. 

Together, the two discount retailers now monopolise 22.3% of sales, while the big three account for 66.5%.

Five years ago the difference stood at 16.6% versus 71.5% so the gap is clearly closing.

Previously regarded as a low-budget alternative, Aldi and Lidl have upped their game, convincing shoppers that they’re as much about quality as they are value.

By developing premium ranges and adding more luxury items to their shelves, Aldi and Lidl have elevated themselves to the level of traditional Irish supermarkets.

Grocery landscape vastly different to just 5 years ago

The relative newcomers have contributed to another major trend in the market — the move towards own-label goods.

Sales have grown by almost a quarter in the past five years, with own-label products accounting for 54% of total grocery spend in the last quarter.

With Aldi and Lidl’s stock predominantly private-label, the two have driven growth in the wider market as shoppers have become more accustomed to seeing these types of ranges on supermarket shelves.

In response to the trend, retailers have expanded their own-label lines — in particular more premium options — setting themselves apart from the rest and giving shoppers a reason to visit their stores instead.

While in the past consumers tended to do one big shop and a couple of smaller ‘top up’ shops per week, Irish households are changing how they buy.

We’re shopping more often, going into stores with particular meals in mind, such as dinner for tonight or tomorrow’s lunchbox.

Planning ahead is less of a concern for consumers who have developed a liking for the freedom to choose what they fancy on the day.

When it comes to what we’re buying, shoppers are increasingly concerned about health, opting for fresh and natural products.

Sales of avocados have risen by an impressive 240% in the past five years, while nuts have experienced a 74% growth.

Convenience is a top priority for shoppers too: the prepared fruit market for example has more than doubled since 2013.

However Irish shoppers still like to indulge from time to time, spending more than €345m on confectionery in the past year — a 21% rise since 2015.

What does the future hold for the grocery market?

The population is expected to grow by 6% before 2020 which will be music to the ears of the grocery retailers.

Despite the recent dip into deflation we also expect price growth to return before too long — up to 7% in the same time period.

The combination of these two factors could boost the market by almost €1.5bn.

The demographic make-up of the country will change too. While the number of 20 to 49-year-olds will remain relatively flat, the over-50 age group is expected to grow by 15%.

This will be good news for some markets and bad news for others.

To gain share in a complex market, brands and retailers must be mindful of the changing Irish consumer otherwise they may lose out to others who are quicker to adapt.

David Berry is director at Kantar Worldpanel Ireland


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