Families switching to discount multiples

Families are spending less and less on their weekly shops and increasingly switching to discounters like Aldi and Lidl.

According to the latest supermarket share figures for Ireland from Kantar Worldpanel for the 12 weeks ending Jul 7, shoppers with children are coming under intense pressure, with families spending less on their weekly shops and switching to value stores.

The study found that for the retailers, it remains a testing period due to the economic circumstances many families find themselves in. It found that Aldi, Lidl, and SuperValu are the only retailers to increase market share, growing to 7.0%, 7.4%, and 19.5% respectively. The discounters’ share of the market jumped from 12.2% to 14.4% in the past year.

Tesco’s share in the market dropped from 28.8% for the same period last year to 27.6% this year. Dunnes also saw their market share drop from 22.2% to 21.5%, while Superquinn remained unchanged at 5.4%

Commenting on the findings of the research, director at Kantar Worldpanel Mark Thompson said that should the upward trend of consumers switching to discounters continue, Aldi and Lidl’s share of the Irish market could jump to 15% by the end of the year.

“The discounters continue to benefit from shoppers who are looking to actively manage their grocery spend. If this performance carries on for the rest of the year, Aldi and Lidl’s combined share of the Irish market will hit 15% by December. The other retailers face a range of opportunities. Dunnes needs to concentrate on retaining its family customers, while Tesco and SuperValu must encourage existing family shoppers to spend more in store.”

He said that although inflation is stabilising, price increases are nearly double the rate they were last year.

“Consumers are responding by cutting back with families spending, on average over this year, €67 less than they did in 2012. As a result, we have seen the overall market decline by 0.2%,” he said.

In a statement, Aldi said it was “pleased” with the findings of the latest Kantar Worldpanel report.

“Aldi has been the standout performer in the Irish grocery market in recent years, maintaining its position as the fastest growing supermarket in the country since Jul 2008.

“Our focus on offering consumers brand quality Irish own-brand products at consistently low prices has been key to our success. The approach has proven increasingly popular with Irish consumers, resulting in more and more consumers visiting Aldi’s 101 stores every week.”

Lidl refused to comment on the detail of the report saying it was the company’s policy “not to comment on the financial performance of our business which also includes our sales performance”.