Grocery inflation hits record high as shoppers struggle with cost of living

Consumers are increasingly opting for retailer own-brand labels over brands. File picture: iStock

Shoppers forked out an additional €113.56 in the 12 weeks to February 19 compared with the same time last year as record grocery price inflation took hold.

New data from analysts Kantar Ireland showed inflation was at 16.4% last month, despite the Irish grocery market being described as “more competitive than ever”.

Value sales increased by 10.2%, compared to 5% in January due to record-breaking inflation.

Irish consumers are coping with the increased cost of living by shopping more frequently and buying less with Kantar showing volume per trip was down 10.9%, while frequency was up 7%.

Consumers are increasingly opting for retailer own-brand labels (11.9%) over brands (6.1%) while own-label value share has also risen from 42.6% in 2021 to 45% in 2023. Value own-label lines, the cheapest products, saw the strongest growth year-on-year, up 35.8% with shoppers spending €19m more on these ranges.

Emer Healy, Senior Retail Analyst said this growth in sales is largely down to grocery price inflation hitting a new record high.

“This time last year it was 2.4% so a significant 14% increase within 12 months. In a year of rising costs and sky-high inflation, Irish consumers are looking for ways to manage their household budgets.

“This has led to the Irish grocery market becoming more competitive than ever, with shoppers looking for the best deals among the retailers,” she said.

In the 12 weeks to 19 February 2023, take-home grocery sales increased by 8.5%, with shoppers returning to stores more often and contributing an additional €168.7m to the market’s overall performance. As a result, shoppers spent an additional €113.56 per buyer, compared with the same period last year.

Online sales remained strong in the same period, up 5.2% year-on-year with shoppers spending an additional €8m online. An influx of new shoppers boosted online sales by €7.1m, with nearly 18% of Irish households purchasing online.

What's your view on this issue?

You can tell us here

Most impacted by shortages, volumes of cucumbers and tomatoes fell by 17.2% and 8.9% while consumers spent €2.3m more on vegetables year-on-year. Valentine’s Day shoppers spent an additional €1.2m on wine, €1.5m on chilled desserts and €3.8m on chilled ready meals with shoppers spending an additional €326,000 on gifting chocolate.

Pancake Tuesday also saw sales of flour, eggs, butter and chocolate up 11.9%, 29.6%, 19.5%, and 55.5%. While Easter has already hit the shops, Irish consumers are yet to stock up on Easter Eggs with sales of seasonal chocolate down 29% year-on-year.

Dunnes holds the highest share amongst all retailers at 23.6% with a growth of 12.3% year-on-year. Tesco was in second place at 22.9%, with the latest data showing shopper footfall for Tesco at its highest level since January 2020. 79.9% of households visited a Tesco store at least once.