Inflation reaches highest level in almost 10 years

Inflation reaches highest level in almost 10 years

The latest figures from Kantar show that take-home grocery sales for Ireland fell by 4.9% in the 12 weeks to 12 June 2022.

While the decline is softer than last month, grocery price inflation continues to climb and hit 6.5% this period, the highest level in Ireland since February 2013.

Households are facing a potential increase of €453 to their annual grocery bills, the company said.

Emer Healy, senior retail analyst at Kantar, says: “Food and drink prices are on a steady upwards trajectory and many people will be feeling understandably worried about the rising cost of living. Price increases are now set to add an additional €453 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.”

Shoppers are taking additional steps to manage their spending at supermarket tills, and making three fewer trips to the store on average per month than they were this time last year.

Emer Healy says: “Unsurprisingly, 53% of the consumers we spoke to said that they will be actively seeking out any deals and discounts in store because of inflation. This is clear in the shifting balance between brands and private label, where 66% said that they would swap the branded product in their trolley if a private-label item was cheaper.

“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 and Tesco, the retailers with the strongest performance this period, have seen €8.2 million more spent between them on their private label lines. Dunnes’ consistently strong performance has now pushed into the seventh consecutive period this year. The retailer is now tied for first place with Tesco – both holding a 22.1% share of the market.

Despite rising prices, everyone was keen to make the most of the June bank holiday and are looking ahead to a lockdown-free summer.

Emer Healy continues: “Unlike the COVID-19 restrictions of last summer, we’re all busy preparing for our holidays abroad (or even being extra optimistic about the Irish sunshine) and sun cream sales have shot up by 36% compared with May as a result.

“The combination of a bank holiday weekend and the start of barbecue season meant shoppers spent an additional €575,000 more on burgers and grilling food this month than they did in May, and ice cream has also seen an extra €2.4 million heading through the tills. Sales of savoury snacks and carbonated soft drinks, popular at any social occasion, are performing well with sales up by €1.2 million and €930,000 respectively compared to the same four week period in June 2021.”

The online grocery market grew by 9.3% in June.

“Online channels are continuing to grow even over two years on from the first lockdown, which points to its staying power as we adjust to new routines and lifestyle changes.,” Emer Healy says.

“A lot of this growth is coming from families with younger children who are getting organised as the school summer holidays fast approach. They’ve spent an additional €2.3 million on online grocery shopping over June, perhaps hoping to save on extra trips out in the car and avoid the petrol pumps.”

Tesco’s share grew 0.6 percentage points this period. The retailer’s strong performance was helped by a 10% boost in online sales during the month of June, with shoppers spending an additional €2.9 million.

SuperValu now holds 21.7% of the market. Lidl and Aldi follow behind, each accounting for 13.2% and 12.3%.