Price inflation in the grocery market is masking the full impact of a decline in consumer spending in Irish supermarkets, new figures from research firm Kantar suggest.
The latest market share figures from Kantar’s Worldpanel show the value of grocery sales fell 4.9 per cent in the 12 weeks to mid-June compared with the same quarter last year, as the full-throated return of the hospitality sector and a return to pre-pandemic trading norms has eased sales from historic highs.
The sales decline would have been even greater only for inflation pushing up prices. Inflation in the grocery sector now stands at 6.5 per cent, the highest since February 2013, according to Kantar.
“We’ve seen some of the sharpest increases in essentials like butter, eggs, bread, and flour, which are a non-negotiable feature on the shopping list for many of us,” said Emer Healy, senior retail analyst at Kantar. The research firm said inflation will add €453 to the average shopper’s annual bill this year.
The firm’s customer surveys suggest the fear of inflation is beginning to hit home with consumers, who are becoming more open to seeking out cheaper alternative products. Two-thirds of those surveyed by Kantar say they would swap a branded item for a private-label product if it was cheaper.
Among supermarkets, Tesco and Dunnes Stores are now tied at the top of the market as the two largest operators, each with a share of 22.1 per cent. SuperValu has 21.7 per cent of the market, while German discounter Lidl has 13.2 per cent and Aldi has 12.3 per cent.
Kantar said customers spent €8.3 million extra on private-label lines at Dunnes and Tesco in the 12 weeks to the middle of June.
Kantar’s research also suggests online grocery sales were up 9.3 per cent in June, although it is still just a tiny fraction of the overall market – industry sources say online is barely 6 per cent.