Consumers welcome the lowest level of inflation this year, as indicated by the latest data from Kantar Ireland, which monitors the purchasing habits of 5,000 households. In the four weeks leading up to 09th July 2023, grocery sales rose by 9.6%, driven by an average price increase of 11.1% per pack.
12 weeks of data show 14.7% grocery inflation
Over the past 12 weeks, grocery inflation has reached 14.7%, resulting in an average annual increase of €427 in household spending. Shoppers returned to stores more frequently, and they are picking up less volume per trip.
Summer
Irish consumers continue to purchase in the barbeque categories, consumers spent an additional €3.6m on grills, chilled burgers and ice cream combined. With children off school and shoppers off for the Summer, items for picnics and lunches increased in sales. Sales of cooked meats, yoghurts, chilled prepared salads, and hot beverages saw a large increase of €6.1m year-on-year. Alcohol sales saw an increase of 11.2% year-on-year.
Retailer performance
Dunnes, Tesco and Lidl all grew ahead of the market. Dunnes continues to hold the top place in the retail market with 22.7%. This growth is driven by shoppers returning to stores more often (+2.9%) and new shoppers to stores (+2.6 percentage points). Tesco remains in second place with 22.6% of the market. Lidl hit a record new share of 13.9% of the market with a growth of (14.4%).
| Retailer | Market Share % | Growth YoY +/- |
|---|---|---|
Dunnes | 22.7% | 14.5% |
Tesco | 22.6% | 13.6% |
SuperValu | 20.7% | 6.7% |
Lidl | 13.9% | 14.4% |
Aldi | 12.5% | 9.7% |
Key insights for a food and drink producer
The importance of own-label products
Own-label or private-label products continue to show strong growth. Shoppers continue to trade down to own-label products, with sales rising 13.3% compared to brands which grew at 7.6%. Own-label products in the value category saw the strongest growth and are up 26.3% year-on-year, equating to shoppers spending an additional €14.2m on these ranges. Value range has a much smaller share of the market than standard own label, but this highlights the cost-of-living crisis and how it is affecting consumers' shopping habits.
However, according to Kantar's latest Brand Footprint report, Irish consumers still value homegrown brands, with four out of the top five brands chosen being Irish. Producers should be aware of the levers for growth for brands: more presence in the market, being involved in more categories, continuous innovation and products being involved in more moments.
Online presence
Online sales continued to grow over the 12-week period, with a 6% increase year-on-year. Shoppers spent an additional €9m on the platform compared to June’s increase of €3.5m. More frequent trips attributed to its growth. 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 Period
Retailers and producers place great significance on seasonal periods. With Summer in full flight, it's crucial for producers to assess products in their respective categories. Take a glance at nearby products for fresh ideas, popular trends, and flavours, which can often be adapted from other categories. This is critical as you plan for the next key seasonal periods within your categories. Retailers will be analysing market products, so it's imperative for producers to do the same and plan accordingly for Summer 2024. Ask the buyer of your category when they are completing a category review so you can plan accordingly.
If you would like to discuss your retail strategy, please contact me on:
stephaniewalsh@ifac.ie or call me on 0876061478