Thursday 26 April 2018

Tesco feels the squeeze as Aldi and Lidl make gains

Tesco 's share of Ireland's multi-billion euro grocery market has fallen 5pc to 25.2pc according to the latest figures
Tesco 's share of Ireland's multi-billion euro grocery market has fallen 5pc to 25.2pc according to the latest figures
Aldi has an 8.5pc share of the grocery market
German retailers Aldi and Lidl continue to poach consumers from their rivals
John Mulligan

John Mulligan

Tesco has continued to be squeezed by rivals here, with its share of Ireland's multi-billion euro grocery market having fallen 5pc to 25.2pc according to the latest figures.

New rankings from research group Kantar Worldpanel show that Tesco's position as the country's biggest grocery retailer remains under threat.

Supervalu had a 24.7pc share of the market during the 12 weeks to September 14. That was down slightly however on the 25pc it held in the corresponding period a year earlier. Cork-based Musgrave, which controls the SuperValu brand, rebranded all its Superquinn outlets as SuperValu earlier this year.

Kantar Worldpanel said SuperValu had attracted an extra 40,000 households to shop at its outlets during the latest period.

"The trade-off is that reduced customer spend in store has meant a slight dip in sales for the retailer compared to last year," noted the agency.

It said that on average, SuperValu customers have reduced their spending by €16 over the past 12 weeks because they're choosing to buy more own-branded products.

But own-branded products typically generate a higher margin for retailers than branded ones, meaning that although the spend may fall, SuperValu franchisees have an opportunity to make more money by lifting the percentage of own-brand sales.

German retailers Aldi and Lidl were again the big winners as they continue to poach consumers from their rivals.

The pair had a combined 16.8pc share of the market in the latest period, up 13.7pc year-on-year.

Aldi has an 8.5pc share, up 15.1pc year-on-year, while Lidl's is 8.3pc. That's up 12.3pc on the corresponding period last year.

Dunnes Stores maintained its position as the country's third biggest grocery retailer, with a 22.1pc share. That's just under 1pc higher year-on-year.

"Aldi and Lidl have both enjoyed record levels of market share over recent months and this strong performance has continued thanks to increased footfall over the past 12 weeks," said Kantar Worldpanel commercial director David Berry.

He said Lidl had attracted 41,000 new shoppers in the latest period, many lured by back to school offers, while more shoppers are also now visiting Aldi for their main grocery shop.

But Mr Berry also pointed out that Dunnes Stores has been helped by an initiative where it has rounded the euro price of some branded goods. That contributed an additional €15m in sales to the retailer during the period.

Well over a third - 37pc - of branded goods on sale in Dunnes are now in sale at a round euro price point, compared to 32pc a year ago.

It's not all bleak for Tesco either. Shoppers made more trips to the retailer, even though its dominant position is being eroded.

"The challenge for Tesco lies in making sure its customers maintain their in-store spend, which has decreased by almost €2 on average over the past year," according to Kantar Worldpanel.

Grocery retailers are already gearing up for the all-important Christmas retail period.

Dunnes Stores has been running a 20pc money back offer for a limited time, trying to lure more shoppers.

Irish Independent

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