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16 Dec, 2022

What record-breaking grocery inflation means to your food business

Stephanie Walsh, Food Business Consultant , discusses the latest trends in grocery sales and consumer behaviour.

Grocery sales are up 4.6% and grocery inflation is at 14.7% for the latest 12 weeks (27/11/22) from Kantar, the world’s leading data, insights, and consulting company. The key areas that are driving sales are retail price increases, higher frequency retail visits from shoppers and an increase of online sales. 

December is set to be a record-breaking month for grocery sales. Private label continues to grow at 9.6% in the latest 12 weeks showing the importance of value in the mind of the consumer. Premium own label and brands grew at 5.1% and 1.6% respectively. Premium own label is the top tier own brand in supermarkets and is perceived to be more expensive and higher quality than standard own label products.

 

Dunnes in top spot

Dunnes have the top place in the retail market with 23.30% of the market with YoY market share gains. Tesco and Lidl are also gaining YoY market share. SuperValu and Aldi have decreased market share YoY.

RetailerMarket Share %Market Share YoY +/-

Dunnes

23.30%

0.50%

Tesco

22.20%

0.80%

SuperValu

20.90%

-1.20%

Lidl

12.80%

0.40%

Aldi

12.40%

-0.10%

Key insights and advice for food and drink producers

December is set to be a record-breaking month in retail, which means busier stores and busier producers. As a food or drink producer, it is important to understand the retail landscape and visit stores. The below insights will aid your business to gain the most from store visits to plan for the future. 

Own label product growth

Private label products continue to grow at 9.6% in the latest 12 weeks. Specifically, value own label grew at 29% YoY. This highlights inflation pressures on consumers, changing shopping behaviours and the importance of own label products in retail. Value products in specific categories are becoming more important. If your business does not have private label products this is the time to start exploring this option. 

The importance of reviewing the market

It is important that if your category is a key area at Christmas, you are visiting retailers. When you visit the retailers ensure to review the following in your category: product offerings, packaging innovations, retail pricing strategies and supply base. 

Christmas is the key period for innovation so this year will be no different. Sales of premium label products have grown 5.1% YoY and as inflationary pressure is here to stay, this tier will become even more relevant. Pay attention to the premium own label products within your area as there may be potential opportunities for your business to take advantage of this trend. 

 

Sales Review

Despite inflationary pressures Irish shoppers are still purchasing festive treats this year. Additional spending of €3.5m on savoury snacking, €1.2m on gifting and chocolate boxes and €617,000 on mince pies. Some festive staples like Brussel sprouts have seen a decrease in spending of €189,000. It is important as a food and drink business that you review your sales versus previous years to understand the trends in your category and shopping behaviours. You can use these figures for future forecasting, negotiations and 2023 business strategies. 

 

Online presence over seasonal periods

The importance of online presence is even more apparent during seasonal periods such as Christmas. The last 12 weeks saw online sales grow at 3.5%. New shoppers are the growth factor here with nearly 13% of Irish households purchasing groceries online during the month. 

 

More information available here:

Record-breaking grocery inflation in Ireland set to see Christmas spend hit €1.25 billion for the first time (kantar.com)

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