The latest Irish grocery market share figures, released by Kantar for the 12 weeks to 14 July 2019, show overall sales are up 2.7% on last year. This marks a drop in growth compared with the 3.1% increase experienced 12 months ago, which was thanks to a bumper summer featuring soaring temperatures and the men’s Football World Cup. As such, a slight slowdown this year is not unexpected.
For the first time since March 2017, two Irish retailers experienced a year-on-year decline. Tesco sales dropped 0.8% in the most recent period and SuperValu was down 0.5%. Shoppers swayed towards shorter and more frequent grocery trips during last year’s good weather to the benefit of Tesco and SuperValu, which typically boast higher levels of shopper frequency. But every silver lining has a cloud, and both grocers were always going to face an uphill battle to replicate that performance this year.
The retailers have come out fighting in response. Tesco recently reintroduced its voucher campaign offering €10 off every €50 spent, and will be hoping a renewed focus on this type of promotion will help it capture a greater share of high value trips and move back into growth. The average value of a shop at Tesco is currently €24, behind Aldi on €27 and some way off Dunnes, which offers a similar voucher deal, on €42.
Meanwhile, Dunnes is the only one of the three traditional retailers to record year-on-year growth this period, with sales up 6.3%. Twelve months ago Dunnes was the third largest supermarket in Ireland. Thanks to an additional 65,000 customers in the latest 12 weeks the retailer has retained top spot for the eleventh consecutive period. The retailer typically performs strongest in the second half of the year and the run up to Christmas so has a solid base as we move towards its core trading season.
While the average price consumers are paying has risen across the board, Lidl has seen the greatest increase as shoppers have bought more of its premium products. While Lidl has witnessed a slight rise in overall shopper numbers, its success encouraging people to trade up to its premium own label and branded lines is a key reason behind its growth. Nearly 100,000 more shoppers bought Lidl’s top tier own label products this period compared to last, with an additional 13,000 shoppers buying branded goods as well.
Both Dunnes and Lidl have capitalised on a growing trend among shoppers who prefer to prepare meals from scratch. Inspired by the success of meal kit brands and convenience cookbooks, recent package deals on the constituent ingredients for home-cooked classics like spaghetti carbonara and bolognese have been popular at both retailers. Sales of those key meal ingredients recorded strong growth across all the retailers, with herbs up by 26%, spaghetti by 10%, passata by 15% and mince by 11% – all comfortably ahead of the overall market.
Aldi announced another two fresh produce-focused concept store openings in Ireland this month – known as Project Fresh – underlining its commitment to the category. Sales at the retailer are up 12.8% on last year, with spend on fresh products typically outperforming overall growth. For example, dairy products are up by more than a third, while vegetable sales have grown by 15% as Aldi continues to capture share in the sector.