Irish take-home grocery sales fell by -4.5% over the 12 weeks to February 20, 2022, according to the latest figures from Kantar. However, spending still remains 11.1% higher than before the pandemic.
This drop in spending comes as grocery price inflation over the past 12 weeks hit 2.4%, marking the seventh consecutive month of accelerating inflation. The number of products sold on promotion fell by 10.9% year-on-year as retailers sought to manage mounting supply costs.
“Prices are rising across the board and that’s really being felt at the grocery tills,” revealed Emer Healy, Senior Retail Analyst at Kantar. “We’re now starting to see this reflected in shopper behaviour, with people increasingly opting for private label lines over branded products in an attempt to drive down the cost of their weekly shop.”
Lidl, which has recently rolled out a new advertising campaign pushing their ‘inflation buster’ prices, now holds a 12.2% share of the grocery market. The retailer was boosted by new shoppers who contributed an additional €4.1m to overall sales figures this period. Aldi also gained market share over the past 12 weeks and now accounts for 11.7% of total sales. “Supermarkets have been quick to respond to growing concerns over the cost of living through targeted ad campaigns and voucher schemes,” Emer explained. “These kinds of tactics will only become more important as grocers battle for the biggest slice of consumer spend in a challenging environment.”
Further loosening of Covid-19 restrictions during February contributed to the overall fall in supermarket sales this period as people returned to offices and city centres. “People are finding their feet in their new routines, with many juggling commuting and socialising again after months at home,” Emer said. “Shoppers spent an additional €4.3m on chilled convenience items like pizzas and ready meals over the latest month, as families turned to quick and easy meal options to feed the kids while schools were out over mid-term week. With convenient options on the rise, home baking is clearly lower on shoppers’ agendas. Sales of flour, eggs and chocolate spreads were all down 27.6%, 20.6% and 35% respectively in the last four weeks.”
The adjustments to Covid-19 restrictions across the country again impacted how and where shoppers bought groceries, with online’s share of the market falling to 5.7% from 6.2% in February 2021. “Shoppers are returning to stores and getting less delivered, and we’ve seen a 15% drop in online grocery sales to the tune of €9.4m in the last four weeks as a result,” Emer noted. “Retailers have really invested in bolstering their online capabilities over the past couple of years and the proportion of groceries bought online has grown significantly since 2018. However, the growth of online grocery which we saw during the pandemic is now beginning to stabilise and has reached a natural ceiling as we ease back into life out of lockdown.”
The bad weather throughout February also helped to level out online sales over the past few weeks, according to Emer: “This is especially true for people in Munster, who were among the first to receive red weather warnings during Storm Eunice. Online sales in the area were only down by 7%, a much softer decline than the rest of the country, as people prepared for strong winds and possible flooding.”
All of the major retailers saw take-home grocery sales fall in the 12 weeks to February 20, 2022, compared with last year, though they remained in growth compared with pre-pandemic. Dunnes have retained their position as Ireland’s largest grocer this month, holding 23% of the market. SuperValu claimed a market share of 22%, while Tesco followed closely behind with 21.9%.
