Inflation in the price of grocery items hit its highest level for almost 10 years in mid-June and could add €450 to the average annual shopping bill according to Kantar.
The annual rate of grocery inflation hit 6.5% in the 12 weeks to 12 June, the highest level in Ireland since 2013.
Rising prices for daily essentials had an adverse effect on sales, which fell 4.9% year-on-year during the period, an improvement on the 6.5% sales drop recorded in May.
"Food and drink prices are on a steady upwards trajectory and many people will be feeling understandably worried about the rising cost of living," said Emer Healy, senior retail analyst at Kantar.
"Price increases are now set to add an additional €450 to our average annual grocery bill, which is over €100 higher than the figure we quoted back in early May. We’ve seen some of the sharpest increases in essentials like butter, eggs, bread, and flour, which are a non-negotiable feature on the shopping list for many of us.”
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Inflation has also impacted consumer behaviours, with shoppers making three fewer trips to supermarkets per month on average compared to the same period last year and half of shoppers now actively seeking out deals and discounts in stores.
"This is clear in the shifting balance between brands and private label, with two out of three consumers saying they they would swap the branded product in their trolley if a private-label item was cheaper," Healy said.
"We expect this trend to continue over the next 12 months, and those retailers offering good value, own-label products and promotions will be the most successful in attracting and retaining customers.”
Dunnes Stores and Tesco added a combined €8.2m in own-brand sales and the companies are now tied for first place in terms of market share, each commanding 22.1% of consumer spending on groceries.
Among the major multiples, SuperValu has seen the largest annual decline in grocery spend, according to Kantar (chart). followed by Aldi and Lidl.
Dunnes Stores has proved most resilient to shopper cut-backs, with Tesco also faring relatively well. Corner shops are the most exposed to penny-pinching consumers cutting back on discretionary spending.
Tesco's market share grew by 60 basis points during the survey period, helped by a 10% increase in online sales during the quarter to mid-June, to pull even with long-time frontrunner Dunnes, with SuperValu just behind on 21.7%. Lidl (13.2%) and Aldi (12.3%) round out the top five.
Overall, the online grocery market grew by 9.3% y-o-y in the three-month period, bucking the trend seen as the country returned to more established shopping patterns following the lifting of Covid restrictions.
(Pic: Getty Images)
