Grocery price increases help supermarkets take in €2.67bn at tills
The five main supermarkets that dominate the Irish grocery trade have been boosted as the long period of stagnating prices comes to an end.
Market researcher Kantar Worldpanel said that prices of 30,000 grocery items it regularly monitors rose by an annual 1.5% in the latest 12 week period.
That’s down from the 1.7% inflation rate in the previous period that covered post-Christmas spending but is much higher than January’s overall inflation rate of 0.7%, as measured by the CSO.
Irish grocery prices had long benefited from the slump in the value of sterling against the euro in the wake of the UK’s vote to leave the EU in the summer of 2016.
With many grocery items imported directly from across the Irish Sea, the strong euro had helped push down the prices of grocery items.
However, recent Kantar surveys appear to suggest that the prices of grocery items are starting to rise steadily after sterling clawed back some of its losses in the past year.
“Grocery sales increased by 3.5% in the latest period, with rising prices helping all the major retailers achieve growth,” Kantar said.
Overall sales topped €2.67bn in the 12 weeks to February 19, up from €2.58bn in the same period a year earlier.
The lion’s share of the spend, or 88% of the €2.67bn, continues to be spread across only five retailers.
A strong growth spurt helped Dunnes Stores secure 23% of the spend in the latest 12 weeks, putting some distance between it and its largest rivals.
At 21.6%, Tesco was the second largest grocery retailer by spend, ahead of Musgrave’s SuperValu, on a share of 21.3%.
Aldi grew the most in the period to secure 11.2% of the market over the 12 weeks, with its fellow German retailer Lidl taking 11% of the market.
“Grocery prices rose by a further 1.5% in the most recent 12 weeks, marking the first time an increase has been recorded for four consecutive periods since February 2017,” said Douglas Faughnan, consumer insight director at Kantar Worldpanel.
“Prior to this, a number of factors had contributed to the lengthy spell of deflation, not least the intense price competition between retailers which has driven down costs for consumers and has been to the benefit of Irish shoppers overall,” said Mr Faughnan.
“While branded sales have remained resilient despite higher prices, growing at 3% and accounting for 47.3% of overall sales, continued inflation may drive Irish consumers to trade down to cheaper own label ranges which are already growing at 4% in the latest 12 weeks.”
