Rising prices drive grocery sales growth in Ireland
The latest figures from Kantar Worldpanel show the Irish grocery market grew by 3.5% in the 12 weeks to 24 February 2019, putting the Irish grocery sector on a solid footing as the UK finalises preparations to leave the EU. After a prolonged period of deflation, an upward trajectory in grocery prices is making a significant contribution to growth.
Douglas Faughnan, consumer insight director at Kantar Worldpanel, comments: “Grocery prices rose by a further 1.5% in the most recent 12 weeks, marking the first time an increase has been recorded for four consecutive periods since February 2017. Prior to this a number of factors had contributed to the lengthy spell of deflation, not least the intense price competition between retailers which has driven down costs for consumers and has been to the benefit of Irish shoppers overall. The continued growth of Aldi and Lidl who now account for 11.2% and 11% of the market respectively has encouraged the three traditional retailers to bolster their value credentials by launching promotions such as Tesco’s The 800 campaign, Dunnes’ Everyday Savers and SuperValu’s Fill Your Trolley.
“Meanwhile, a stronger euro to sterling exchange rate has made British imported goods and ingredients cheaper, allowing retailers to pass some of those savings on to Irish consumers. However, with prices already rising as Britain’s exit from the EU draws near, increases are likely to continue for the rest of the year. With more than €3.5bn in food imports from the UK, the currency fluctuation can have a substantial impact on grocery prices in Ireland”
While many shoppers may have treated their other halves to an evening on the town for Valentine’s Day, supermarkets cashed in from those choosing to celebrate at home. Douglas Faughnan explains: “Convenience continues to be a major priority for people celebrating with a night in. Valentine’s Day is no different, helping drive overall sales of chilled ready meals and chilled desserts, which grew by 8.4% and 6.9% in the past three months.