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Friday 19 September 2014

Shoppers benefit as prices for key grocery items fall

Aideen Sheehan, Consumer Correspondent

Published 19/03/2014 | 02:30

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Consumers have been benefiting from drops in the prices of key groceries.

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Shoppers had to fork out 0.6pc less in supermarkets than a year ago, the latest Kantar Worldpanel Ireland figures show.

This was the grocery market's weakest performance since September 2011, with falling prices for vegetables and bread a key part of this as they are cheaper than they were a year ago, Kantar said.

Its database of 30,000 grocery products showed overall prices had risen by 1.7pc in the last year, the lowest inflation in nearly two years, although shoppers were also likely to be reducing their spending further by trading down or looking for special offers.

Consumers also continue to switch to the discount chains Aldi and Lidl, which are the only supermarkets seeing strong growth in sales in the 12-week period to March 2 compared with a year earlier.

Although it was affected by the nationwide tightening of household spending, SuperValu is just behind Tesco as the country's second largest retailer with 25.3pc of the market now that all 24 Superquinn outlets have been fully amalgamated.

Kantar commercial director David Berry said that SuperValu has been able to retain its market share while acquiring assets.

"Now the main challenge for SuperValu is to convince previously loyal Superquinn shoppers of the merits of the SuperValu brand and ultimately hold onto their custom," he said.

Tesco sales continued to fall by 4.9pc to 26.4pc of the market, while Dunnes suffered a similar 4.7pc dip to 22.4pc market share.

German-owned Aldi, meanwhile, enjoyed a 22.8pc surge in sales, giving it a market share of 7.5pc, while rival Lidl saw 11.6pc growth to 7pc.

Despite the overall grocery market declining for five months in a row, Aldi and Lidl continued to impress with double-digit growth, said Mr Berry.

"Over the past three years, Aldi and Lidl have captured a combined 3.8 share points from the competition and have grown sales by 37pc in an overall grocery market which has grown by just 1pc," he said.

"Conversely, Tesco and Dunnes have both experienced declines in market share and actual sales as the result of the pressure exerted by the increasingly competitive market place."

Other retailers which include M&S, Spar, Centra, butchers and cross-border stores, had an unchanged market share of 11.5pc.

Mr Berry said that consumers had spent €29m less on fruit and vegetables than the same 12-week period to early March last year, a drop of 9pc. This was significant as €1 out of every €8 spent on groceries goes on fruit and vegetables.

Irish Independent

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