Wednesday 23 August 2017

Christmas showdown as SuperValu and Dunnes go head-to-head in battle for consumers

Dunnes Stores snatched the title of the country's largest grocery retailer last month from SuperValu
Dunnes Stores snatched the title of the country's largest grocery retailer last month from SuperValu
John Mulligan

John Mulligan

Dunnes Stores and SuperValu now hold an equal share of Ireland's multi-billion euro grocery market, as the pair battle it out for supremacy among consumers over Christmas.

New figures from research group Kantar Worldpanel show the retailers each have a 22.5pc share of the market.

Dunnes Stores, headed by Margaret Heffernan and Frank Dunne, snatched the title of the country's largest grocery retailer last month from SuperValu. It was the first time in over a decade that Dunnes had secured the top spot.

But SuperValu, under managing director Martin Kelleher, which is controlled by the Cork-based Musgrave group, will be vying to reclaim the title.

And with shoppers now in the final week before Christmas, there are intense efforts by all the chains to lure customers who are splashing out for the festive season.

Previous figures from Kantar Worldpanel showed that Dunnes Stores had a 22.6pc share of the grocery market during the 12 weeks to the end of November 6. SuperValu had 22.4pc.

The latest figures, for the 12 weeks ended December 4, show that the two retailers now share the number one position, while Tesco has a 21.8pc share.

Dunnes' share, in value terms, rose by 4.8pc, while SuperValu's was 1pc higher. Grocery inflation in the period stood at 0.6pc.

Tesco has been focusing on cutting prices to attract more customers. That hits the value of its sales - the figure that Kantar Worldpanel reports on. But the value of its sales was still 1pc higher in the latest period.

David Berry, director at Kantar Worldpanel, said the latest figures are a "real testament" to how competitive the grocery market is.

"Just 0.7 percentage points now separate the three largest retailers as we enter the all-important festive period," he said.

He added that evidence of Tesco's turnaround has been seen in the last quarter. Mr Berry said that the chain's sales have shown positive growth for the first time since March.

"An additional 10,000 households have chosen to shop with Tesco in 2016 and are returning to the retailer more frequently - a clear positive sign for the grocer," he said.

Dunnes Stores has built its loyalty through its 'Shop and Save' campaign, a discounting ploy that has cost it tens of millions of euro.

But it has been also developing its product lines and acquiring businesses, moves designed to help it improve its overall offer to consumers.

Almost 64pc of households visited Dunnes Stores in the latest reported period, spending an average of €39.50 a visit. That's a €3 increase per trip compared to the corresponding period last year.

Mr Berry said that Dunnes Stores has also seen more shoppers opt to buy branded goods - the only retailer to experience that in the latest period. Branded sales at the chain rose 5.7pc, while own-label goods sales were up 3.3pc.

Lidl increased its share of the market by 4.3pc to 11.1pc. Aldi's rose by 6.1pc, also to 11.1pc.

Grocery chains are facing increased pressure this Christmas following the decline in Sterling after the UK's June Brexit vote.

A report yesterday from credit risk analyst firm Vision-net.ie showed that 24pc of Irish shoppers intend to travel across the border to avail of weaker Sterling. "Irish consumers are cognisant of the impact of Brexit and a weakened Sterling, and plan to avail of the knock-on benefits this Christmas," said Christine Cullen, managing director of Vision-net.ie.

Irish Independent

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