Business Irish

Thursday 8 December 2016

Dunnes Stores blasts past its rivals to reclaim grocery crown

Published 22/11/2016 | 02:30

Margaret Heffernan
Margaret Heffernan

For the first time in 12 years, Dunnes Stores is the biggest grocery retailer in Ireland.

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The chain, controlled by Margaret Heffernan and her brother Frank Dunne, has dramatically snatched the title from SuperValu, according to new figures from research group Kantar Worldpanel.

And it all means that the market is shaping up for a battle royale over Christmas, especially as weak sterling could prompt an exodus of shoppers from Border counties to Northern Ireland to capitalise on bargains there.

The latest data shows that Dunnes Stores had a 22.6pc share of the multi-billion euro grocery market during the 12 weeks up to November 6.

It pushed SuperValu, the chain controlled by Cork-based retail group Musgrave, into second place, with a 22.4pc share.

The shift at the top also means that embattled Tesco has been pushed into third place, completing its embarrassing dethronement after SuperValu first toppled it from the top spot last year.

Tesco had been the king of the Irish grocery market for a decade. Tesco now has a 21.4pc share of the market.

But the British chain emphasises that as part of its push to lure customers, it has been cutting prices.

The Kantar Worldpanel figures rank the retailers based on the value of their sales, rather than volume.

So although the value of Tesco's sales here fell 0.6pc in the latest period, it has been clawing back volumes.

Releasing interim results last month, Tesco said that its like-for-like sales growth in Ireland was 0.3pc in the first quarter, and 0.1pc in the second quarter.

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At Dunnes Stores, the value of its sales soared 6.7pc in the latest Kantar Worldpanel survey. At SuperValu, the increase was 2.3pc.

Dunnes' re-emergence as the country's top grocery retailer has come at significant expense.

The chain has spent tens of millions of euros on its 'Shop and Save' campaign which gives customers €10 off for every €50 they spend. "Growth across a wide range of categories has contributed to the retailer's overall sales increase of 6.7pc year-on-year, with toiletries, alcohol, frozen food and confectionery performing particularly well," according to Kantar Worldpanel director David Berry.

Dunnes Stores has been buying food and beverage suppliers, including Café Sol and Whelan Food and Meat Processors, to create more upmarket offerings for customers.

Last year, it opened a concept store in Rathmines, Dublin, showcasing its new developments to customers.

Mr Berry added that during the latest period Dunnes Stores has persuaded its customers to add one extra item per trip to every basket - worth, on average, €3.20.

He said it "may not sound like much, but across the country this adds up to an additional €2.8m each week".

The value of sales performance at Dunnes, SuperValu and Tesco came amid a backdrop of grocery inflation that stood at just 0.7pc in the latest period. That compared to grocery inflation of 1.3pc in the previous period.

Kantar Worldpanel said that German chain Aldi saw the value of its sales rise 6.6pc in the period, to give it an 11.3pc share of the market.

Lidl held an 11.4pc share, with the value of its sales having risen 5.3pc.

The two German chains have been faring well during previous Christmas shopping periods, having extended the range of products they offer.

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