Here's how grocery prices have soared over the last 10 years

Private label’s share of the grocery market is growing, with retailers' own lines now accounting for 46.3% of total grocery sales. File picture

Shoppers are spending less as grocery inflation has soared to its highest levels in nine years, fresh data shows.

Hard-pressed families are struggling with runaway costs, and data from consultancy firm Kantar shows supermarket bosses are also feeling the squeeze through supply chain issues, with fewer offers to entice customers into deals in store.

With runaway energy prices causing headaches for many families, the price of food, drink, and household items are also been taken into consideration when balancing household budgets.

Irish supermarket sales fell by 7.3% over the 12 weeks to March 20, Kantar said, while grocery price inflation has reached 3.7%, the highest level since October 2013.

It means Irish shoppers spent €78.2m less during March itself, but are beginning to turn to supermarket own-brand items while forgoing traditional household name brands as a way to tighten the belt.

Private label’s share of the grocery market is growing, with retailers' own lines now accounting for 46.3% of total grocery sales, Kantar said.

The firm did say, however, that overall sales are still up on 2020, by 1.3%.

Emer Healy, senior retail analyst at Kantar, said: "As spiralling costs bite at the heels of retailers and shoppers, supermarket prices are being pushed up. The number of products sold on promotion has dropped by 5.7% as the grocers look to mitigate supply chain pressures, and we’ve seen a marked increase in the average price of staples like bread, butter and toilet paper over the last 12 weeks.”

End of Covid restrictions

The dent in supermarket sales has also been felt by workers returning to pre-pandemic norms as Covid-19 restrictions come to their conclusion, Ms Healy added.

"All our remaining Covid-19 restrictions have eased across Ireland and that’s making its mark on grocery sales. Not only are people heading back to the office, but they’re also enjoying returning to pubs, cafés, and restaurants, and as a result are picking up more food while on the go, rather than from the supermarkets.”

After two years of decision-making based on the unknowns of where the pandemic could lead, Irish shopping habits are now driven by the certainty that prices are soaring, Kantar said.

This is a stressful time for consumers and that anxiety is being felt on the shop floor. With promotions down, shoppers are focused on seeking out the cheaper alternatives. Private label’s share of the grocery market is on the rise and has grown by 1.2% since last year. 

"Retailers’ own lines now account for 46.3% of total grocery sales. Headlines around shortages of pasta and flour have also seen sales of those products soar, with both categories boosted by 22% and 30% respectively during the month of March," Ms Healy said.

The growth of online shopping has been "staggering", Ms Healy added.

"Since 2018, online’s share of the market has grown by 3.1 percentage points, a boost largely driven by couples without children who are natural converts to online technology. 

"Since the same period in 2018, the proportion of this demographic buying online has nearly doubled, going from 14% to 26% in March 2022. 

"By 2024, we estimate that online will hold a 6.6% share of total grocery sales — a figure which would have seemed crazy before Covid-19 came along."