Grocery inflation is at 15.4% for the latest 12 weeks (25/12/22) from Kantar, who monitors the household purchasing habits of 5,000 households. Irish inflation is even higher than in the UK which currently stands at 14.2%. The key areas that are driving the growth is predominately inflation as volumes fell.
As anticipated December was a record-breaking month for grocery sales. Sales were valued at €1.3bn. The busiest trading day of the year was Friday 23rd of December. According to Kantar, half the population stocked up on festive treats on the 23rd.
In the context of declining volumes in general, turnover of many festive treats grew, for example, mince pies by 15.5%, chocolate, cheese and paté rose by 9.9%. However, wine saw a growth in sales and in volume growth of 7.3%. Post lockdown, as larger gatherings took place, 25,000 more households purchased whole turkeys rather than rolled turkeys. Unsurprisingly, sales of cold and flu products grew as Irish households spent an additional €828,000 and €547,000 on vitamins.
Dunnes in top spot
All retailers saw strong growth in the 12 weeks to 25 December. Dunnes have the top place in the retail market with 23.70% with a 9.6% growth year-on-year. Lidl have the strongest year-on-year growth of 10.1%.
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Key insights for a food and drink producer
The importance of own label products
Own label products continue to show strong growth. The festive period saw own label product sales grew by 11.1% compared to brands which grew by 4.2%. Premium label growth was the strongest in Dunnes (Simply Better), up 22% year on year. Lidl own label range grew by 47.2% year-on-year. As inflationary pressures continue, it is important to understand your businesses strategy towards own label offering.
Online sales continued to grow with an 8.5% increase year-on-year growth. Online share now sits at 4.6%. The pandemic fast tracked growth here. Since 2018 this sector has grown 2.5% points compared to December 2018. This route to market is growing and should be reviewed as part of your retail strategy to ensure continued success within your business.
As inflation continues to rise some consumers will have to trade up trade down or trade off on certain products. As a food and drink producer it is important to understand where your product(s) sit in the consumers basket. Review your sales versus previous years and understand if inflation has impacted your volume sales. This may be time to review your product and brand proposition for 2023 to ensure growth and stability.