Business Irish

Sunday 17 December 2017

Retail under pressure as shoppers flockingto Aldi

Donal O'Donovan

Donal O'Donovan

Aldi is gobbling up market share while Dunnes Stores is under pressure to retain its long-held status as the country's second-biggest grocery chain, according to new figures for the sector.

The data from research group Kantar Worldpanel shows the grocery sector going through one of the most radical transformations in decades as hard-bitten consumers change their spending habits.

Discount retailer Aldi is the biggest winner from the trend, grabbing market share from rivals at an increasingly dramatic pace, according to the new figures.

They show that Aldi increased its share of total household spending on groceries by almost 30pc over the past year.

Price remains the German discounter's main selling point, but a growing network of shops and increased advertising are driving the trend.

"Aldi has been the star performer for a number of years and this is reflected in its 29.8pc growth rate.

Strong

"Its strong performance is down to a solid combination of new store openings, a strong advertising campaign and a consistent evolution of the goods on offer in store," according to David Berry, commercial director at Kantar Worldpanel.

In a shrinking market, growth for Aldi is coming at the cost of competitors.

According to Kantar's data, Irish-owned Dunnes is under pressure, losing market share not just to the likes of Aldi but to its main rivals Tesco and SuperValu.

The latest figures show that SuperValu is closing the gap on Dunnes Stores; if trends continue, the Musgrave's-controlled chain will see its share of the market beat 20pc over the coming year, while Dunnes has already dropped to below 22pc. Tesco's status as the biggest player in the Irish grocery sector looks unassailable after its market share climbed 2.5pc to 28.6pc, well ahead of Dunnes and SuperValu.

The overall grocery market has suffered a 0.5pc decline, and pressure on the economy and the likely impact of December's Budget on income means there is little prospect of any turnaround in the near term. Rising inflation coupled with an increase in world food prices means the price of groceries has increased at a rate of 2.6pc in the 12 weeks to the end of September, according to the Kantar Worldpanel research.

That's well ahead of the consumer price index published by the Central Statistics Office, which was running at 1.6pc in September, but includes clothes, fuels and rent as well as groceries.

Irish Independent

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