Decline in number of grocery shops continues
In 2001, there were more than 8,100 different stores selling groceries.
At the last count in 2006 the number was 6,400 and on a steep downwards trend.
Yesterday, the Government’s competition watchdog said it was concerned about the lack of competition in the grocery market where prices have rocketed despite the lifting of price controls.
“We have seen a very significant growth in the number of (supermarket) outlets, which have doubled since 2001,” said Competition Authority chairman Bill Prasifka.
Grocery giants such as Tesco, Dunnes Stores and Superquinn have doubled their amount of space used for selling food while local chains like Centra have also increased their presence.
“(But) the number of independent retailers has been in decline and this has been a consistent factor of the recent past. We see no change in that trend,” he said.
The authority has spent the past two years looking at Ireland’s grocery market after the demise in 2006, of the Groceries Order law, which controlled prices of food, drink and household essentials in shops. It found that the lifting of price controls has not led to consumers saving money — despite its own claims that shoppers were paying €500-a-year more than they should because of the order.
Instead, Mr Prasifka blamed rocketing prices of food on world markets, arguing that the old Groceries Order allowed retailers to fix prices.
“Recent rapid rises in the price of food is related to movements in international markets and it is neither expected or even desirable that Ireland should be insulated from that,” he said.
Competition watchdogs had spotted a potential cause for concern about the growth of chains like Centra and Spar, which are owned by wholesale giants Musgrave, of Cork, and BWG Foods respectively.
“The (savings) by buying a range of products in bulk can be passed on to consumers provided there is significant competition,” said Mr Prasifka.
“Competition is driven by local markets here and we have some concerns that local markets would be competitive (enough).”
The most significant change in the past decade to Ireland’s grocery market was the arrival of German-owned discount chains Aldi and Lidl, he said.
Yet Aldi and Lidl’s market share is no more than 10%, while Tesco has as much as 20% of the market Dunnes up to 15%, Superquinn up to 10% and SuperValu up to 15%.
The study also found 80% of Ireland’s independent wholesale grocery trade was in the hands of two operators, BWG Foods and Musgrave’s, and local markets might be too hard for newcomers to compete in.
The Consumers’ Association of Ireland said shoppers got a raw deal as many big retailers did not compete.
