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Dan White: How slump turned us into shoppers who demand value

It may have taken the worse economic downturn in almost 80 years, but at last most Irish shoppers are actively looking for better value. A soon-to-be published report by the National Consumer Agency shows that 53pc of shoppers now use promotions and coupons when doing their shopping, up 15pc since mid-2009.

Traditionally one of most remarkable features of the Irish grocery market was the fact that consumers purchased branded goods and that they paid full price for them.

By comparison, most other European and American shoppers bought a far higher proportion of own-label goods, sought out special offers and had no hang-ups about using coupons and money-off vouchers.

That is now changing, fast. One of the silver linings surrounding our current economic cloud is the fact that, with money now extremely tight, Irish shoppers are rapidly shedding their inhibitions.

It started with Aldi and Lidl. When they first arrived in this country in 1999 shopping with the German discounters was a guilty secret for most consumers. Even as we flocked to the new arrivals, and kept coming back for the bargains, we preferred not to talk about it. That began to change some time around 2007. As worries about the economy increased, Aldi and Lidl quickly went from the shopping equivalent of the love that dare not speak its name to being chic.

Suddenly, it was fashionable to boast to your friends of all the money you were saving by shopping at the discounters.

With the economy rapidly tanking and the discounters' combined market share approaching 10pc the conventional supermarket chains were forced to react last year.

Suddenly price cuts, special offers, buy-one-get-one-free (bogofs in retailspeak) and coupons became all the rage. Irish shoppers went from being the most purse-proud in Europe to being prepared to ruthlessly hunt for value. And about time too. For far too long Irish consumers have allowed themselves to be ripped off. Something which the big supermarket chains have ruthlessly exploited. When Tesco re-entered the Irish market in 1997 it was reputedly amazed at the willingness of Irish consumers to pay far more for most items than their British counterparts.

In Britain, bogofs and special offers are the norm rather than the exception for most common lines. Shoppers expect these discounts and will hold off buying until they get them. For many items such as detergents, a majority of merchandise sold, is either discounted or on promotion.

In fact, canny consumers have learned to play one supermarket chain off against another in their search for value. This is, of course, only as it should be. Most shoppers have only a limited amount of cash and must make it stretch as far as they can. Promotions and special offers allow them to do this more effectively.

That's the good news.

Irish consumers, squeezed by wage cuts, tax hikes and job losses are now behaving more like those in the rest of Europe and North America.

But is this a permanent change in behaviour or merely a temporary adaptation to exceptional circumstances?

Will we revert to our previous spendthrift ways when times get better.

I, for one, hope not.

The lesson we have all learned during the current economic downturn of the need to constantly look for value when doing our shopping was desperately needed. Our willingness to tolerate paying over the odds was one of the reasons that the Irish price level is one of the highest in the EU, over a quarter above the eurozone average.

It is only by constantly squeezing the supermarkets and other retailers that we can begin to get the overall Irish price level down and help restore our lost international competitiveness.


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