Dunnes and Tesco neck and neck in grocery war
Published 27/09/2016 | 02:30
The battle for dominance in Ireland's multi-billion euro grocery market is intensifying, with Dunnes Stores now neck-and-neck with Tesco in the ratings.
New data released by research group Kantar Worldpanel shows that Dunnes Stores and Tesco now each have a 21.6pc share of the market.
Tesco now faces the prospect of becoming the third-biggest grocery retailer in Ireland, having been ditched from the top spot last year by SuperValu, the chain controlled by the Cork-based Musgrave group. SuperValu now has a 22.4pc market share.
Tesco has been trying to focus on delivering more value to customers, resulting in a decline in the value of its sales.
Dunnes Stores, controlled by siblings Margaret Heffernan and Frank Dunne, has been assaulting Tesco and SuperValu with a revamped product range.
But it's the retailers intense couponing - which has cost it tens of millions of euro - that has been the biggest driver of its sales boost. Those vouchers offer shoppers €10 off every €50 they spend. But the strategy has been paying off in terms of delivering more customers through its doors, and enticing them to boost their spending.
"Larger trips have boosted sales for Dunnes, with the average spend increasing by €2.50 to €37.20 in the latest quarter, compared with the same time last year," said Kantar Worldpanel director David Berry. "Dunnes has successfully tempted shoppers to add more expensive items to their baskets, with the average price per item rising to €2.05 - an increase of 12pc on last year."
The value of sales at Dunnes Stores during the 12 weeks to September 11 climbed 6.3pc, compared to a 2.3pc decline at Tesco. At SuperValu, the figure was up 3.1pc.
But grocery inflation stood at 2.2pc in the latest period, meaning the underlying rises at SuperValu and Dunnes Stores were lower, while the decline at Tesco was greater.
Tesco had some good news despite the decline, however. While the value of its sales fell 2.3pc, it continues to sell more items, with volume sales 1.9pc higher than the same time last year, noted Kantar Worldpanel.
Sales at Aldi rose 5.4pc in the period, giving it an 11.4pc share of the grocery market. At Lidl, sales were 4.5pc higher, giving it an 11.7pc share.