Tesco feels sales pinch as Dunnes pulls in the customers
DUNNES Stores is fighting back in the groceries market, edging closer to its top rival Tesco in the supermarket wars as the all-important Christmas trading season gets under way.
The latest data from research group Kantar Worldpanel – for the 12 weeks to October 13 – shows that Dunnes managed to boost its share of Ireland's multibillion-euro grocery market by 5pc to 23pc.
It seized the extra slice of the market after launching its 'Shop and Save' campaign, which is aimed at enticing customers in the run-up to Christmas. The retailer ran a similar campaign last year, which also increased its market share.
In the 12 weeks to January 20 this year, Dunnes had a 24.3pc share of the market after it ran the campaign over last Christmas. Its shoppers bought more items and increased the value of their baskets.
The latest figures mean that Dunnes is now closer to Tesco, the retailer with the biggest market share. But Tesco's share declined 6.5pc in the latest period, to 26.6pc.
German discounters Aldi and Lidl have also fared well again. They had a combined 14.6pc share of the market in the period to October 13. But that's below the record 15.1pc combined share they had in August.
Aldi's share rose 23pc to 7.4pc, while Lidl's climbed 10.3pc to 7.2pc in the latest report.
David Berry, commercial director with Kantar Worlpanel, said Tesco continued to be under pressure here.
"This is the twelfth successive quarter of decline for Tesco, which has lost significant market share to the discounters over the course of the year," he said. "Its 'Tesco Price Promise' campaign is clearly aimed at challenging the view that Aldi and Lidl are cheaper and it will be interesting to see the response from shoppers."
Tesco has promised its customers that if a basket of 10 or more of mostly own-label items costs more at its stores than at Aldi or Lidl, it will give its shoppers a voucher worth up to €10 towards their next shop to make up the difference. It is also including some branded goods in the promotion.
Tesco expects to dish out around 13 million vouchers over the next year to customers, which will be worth between €10m and €13m.
"Many of the grocery retailers have been actively targeting shoppers with money-saving vouchers in recent months and this has led to a change in consumer shopping habits," said Mr Berry. "Shoppers have switched from the 'little and often' approach to stocking up, making fewer trips, but purchasing more items per shop."
Kantar said grocery inflation in Ireland eased to 4.2pc in the 12 weeks to October 13, from 4.8pc in the previous period.