Shoppers turn to own-brand goods as grocery cost jumps 5%

SHOPPERS are paying substantially more for their groceries while the sale of own-brand goods has hit a record high.

The price of groceries jumped more than 5% in the 12 weeks to February 20 compared with a 3.9% rise in the previous period.

Research from the consultancy firm Kantar Worldpanel found that Irish shoppers are cutting back on the amount of groceries they buy. It also found that they are increasingly choosing own-label over branded goods, which now account for 34% of money spent on groceries — the highest level ever seen.

Financially stretched families have found themselves paying more for household staples such as fruit, vegetables and breakfast cereals, which, as well as beer, according to David Berry of Kantar.

He said shoppers are now spending a higher proportion of their weekly shop at discounters such as Aldi and Lidl, and reducing the overall amount of money spent.

Retailers with a strong own-label offering benefited last month, with Tesco, Aldi and Lidl all gaining market share and growing ahead of the market.

Aldi increased its sales by more than 25% and growing its market share by 0.6% since this time last year. Tesco saw sales grow almost 5%, while 3% growth was recorded at Lidl.

SuperValu continued to outperform the market, increasing its market share to 20.2% from 19.9% last year.

At the premium end, Superquinn suffered from consumers cutting back and Dunnes also experienced negative sales growth in the latest period.

Meanwhile, the National Dairy Council (NDC) is predicting that the 2010 trend towards home entertainment will continue.

The NDC said the 3.5% increase in sales of cream during 2010 indicates that more people are cooking and baking at home. A recent Bord Bia survey showed that chilled ready meals saw a growth of 10% in terms of both volume and value in 2010.

The NDC said that while sales volumes of dairy products are up, the overall monetary value is down due to consumers buying cheaper own-brand goods in preference to higher priced brands. Retail milk sales in 2010 were up 2.4% in terms of volume, but the overall value was down 3.4%. Large format pack sizes are showing the strongest increases.

NDC chief executive Helen Brophy said: “Milk has had a good performance in terms of volume of sales, but the consumer's search for value is continuing to put pressure on food producers and retailers. Prices did stabilise at the end of 2010, which was a welcome positive.”

Health issues are still a guiding factor for many consumers with hole milk losing market share to low fat milk, sales of which are up 5%, with a strong lift in the last quarter of the year up to 26%.