In the four weeks leading up to 6th August 2023, grocery sales rose by 6.8%, driven by an average price increase of 8.8% per pack. Shoppers continue to frequent stores more often, up 2.7% YoY.
12 weeks data shows 12.8% grocery inflation
Over the past 12 weeks, grocery inflation has reached 12.8%. Compared to May in 2023 inflation hit its highest peak of 16.5%. There is a slight decline in average prices on the essential lines, this results in €0.36 less on butter, milk and cheese combined. When comparing to 2020, the percentage of packs sold on promotion declined by 2.8 percentage points. The percentage of sales sold on promotion stands at 24.8% which is down slightly on last year 0.2 percentage points. Even though there are fewer items on promotion, customers continue to seek out the best deals in the market.
Summer
The poor weather impacted consumers usual shopping habits within the barbeque categories. Irish shoppers spent €493k less on grills and chilled burgers and €1.3m less on chilled prepared salads year-on-year. Shoppers also spent €2.5m less on ice-cream and a combined €2.3m less on fruit squash and mineral water.
As customers spent more time indoors, sales of take-home confectionary and take-home savouries rose €4.7m and €2.6m respectively. The rain also meant customers spent an additional €2.8m on soup and hot beverages. The decrease in temperatures and rain impacted how often customers ventured to shops, with footfall down for the fifth month in a row. People made 882,000 fewer trips than last month.
Retailer performance
Dunnes, Tesco and Lidl all grew ahead of the market, which replicated the previous 12 weeks. Dunnes and Tesco shares the top place with 22.6% market share each. Contrary to the trend, Dunnes growth is driven by shoppers returning to store more often (+4.2% YoY) and new shoppers to store (+1.3 percentage points). Tesco hold the strongest frequency growth amongst all retailers once again, this is up 16.9% YoY. SuperValu shoppers make the most trips compared to all other retailers. The discounters hold 26.5% market share combined.
| Retailer | Market Share % | Growth YoY +/- |
|---|---|---|
Dunnes | 22.6% | 12.7% |
Tesco | 22.6% | 12.6% |
SuperValu | 20.9% | 5.8% |
Lidl | 13.8% | 12.7% |
Aldi | 12.6% | 7.7% |
Key insights for a food and drink producer
The importance of own label products
Own label products continue to show strong growth. For the third consecutive month own label retains a higher share of the market than brands hitting a value share of 48.1% compared to brands at 46.3%. Shoppers continue to trade down to own label products with sales rising 13% compared to brands which grew at 5.7%. Customers continue to purchase own label products to manage inflation. The increase in the cost of the household weekly shop is €9.10 compared to last year, which is significantly lower than the additional €17.80 shoppers would have paid if they had purchased the same items 12 months ago, based on the current inflation rate. Branded producers should review their promotional pricing and ensure there is a mechanism in place with retailers to drive frequency. There is an opportunity to gain new customers with the correct promotional strategy.
Online presence
Online sales continued to grow over the 12-week period, with a 11.2% increase year-on-year. Shoppers spent an additional €16.6m on the platform compared to July's increase of €9m. More frequent trips attributed to its growth by 12.6%. If you currently have an online presence, it is essential to review your website. Is it fit for purpose? How do you entice customers to purchase your products? Is it easy for potential customers to purchase products? Both the Local Enterprise Office and Enterprise Ireland can assist.
Seasonal Periods
Summer
Retailers and producers place great significance on seasonal periods. You should now have a plan for Summer 2024 and discuss the potential opportunities for the coming year Now that the seasonal period is nearly over, it is a good time to assess and review your summer 2023 assortment, review volume sold, turnover and write off figures to prepare and plan for next year.
Back to School
The 'back to school' period holds significance for retailers; they engage in promotional campaigns and introduce new products in relevant categories. Evaluating these relevant categories is crucial, as being a producer, you might draw inspiration from these promotions and new product launches. Perhaps you haven't previously assessed or strategised for the back-to-school period, but it serves as a substantial sales booster and an additional means of reinforcing your partnership with retailers.
If you would like to discuss your retail strategy, please contact Stephanie on:
stephaniewalsh@ifac.ie or call me on 0876061478