In the four weeks to 4 September, the price of back-to-school essentials (bread, ham, cheese, yoghurt, cereal and milk) rose by 19.5%, making a basket of these staples €2 more expensive.

The most basic items saw some of the biggest jumps with bread up 20%, ham up 12%, milk up 26%, yoghurt up 17%. Collectively, shoppers spent an additional €17m on these products compared to the same period last year, driven entirely by price as volumes were down 6%.

Emer Healy, Kantar senior analyst, comments: “Grocery price inflation is at its highest level since Kantar began tracking grocery price inflation in May 2008. As food and drink prices continue to climb alongside increasing pressure on other household bills, the impact is unavoidable for many Irish consumers.

“The average annual grocery bill could go from €6,985 to €7,753 – that’s an additional €768 a year that Irish consumers will have to spend if they do not make any changes to what they currently buy or where they shop”

As consumers search for better value, the biggest winners are retailer own-label lines. In the latest 12 weeks, sales of own-label products are up 5.8%, representing an additional €72m year-on-year. Value own-label ranges, the very cheapest products in the range, saw even stronger growth up 21.4% compared to the same period last year as shoppers spent an additional €10.2m.

The cost-of-living crunch has also encouraged an influx of new shoppers to go online. In the last four weeks alone, volumes were up as shoppers increased their packs per trip by 2.9% contributing an additional €6.8m to the overall market performance. More than one-in-10 Irish shoppers (12%) now purchase their groceries online.

Sales value rises at grocery giants

Appealing to the need for better deals has helped all major retailers to grow in the last 12 weeks. Market leader Dunnes (22.3% value share) saw growth of 7.2% year-on-year, helped by an influx of new shoppers (up 4.7%), and an increase in shopping trips (up 1.7%). Dunnes traditionally performs well at back-to-school times and experienced strong own-label growth of 13% year-on-year.

Tesco sits at 21.9% share, with sales up 3.9% compared to last year as shoppers return to store more often (6.6%), while SuperValu (21.4% share) continues to attract more trips than any other retailer, with an average of 21.5 trips made in the last 12 weeks. Lidl holds 13.2% share growing 3.5% year-on-year, while rival low-cost retailer Aldi sits at 12.7% share an increase of 1.4% as a result of existing shoppers returning to store more often.

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IF&CR takes a look at how Christmas 2021 will be different – and there are plenty of reasons for good cheer.

This time last year we were all facing another lockdown and non-essential retail and hospitality businesses were having to shutter their doors all over again, yet the grocery sector was about to prove surprisingly buoyant.

This Christmas grocery retailers will be hoping to emulate the Covid bump that we saw last year, which saw a record-breaking  €1.2 billion spent on groceries in December, making it the busiest month ever as families navigated constantly changing restrictions and battened down for Christmas.

Kantar’s figures showed that take-home grocery sales in Ireland rose by 17.0% in the 12 weeks to 27 December 2020, with many turning to the supermarket to provide some sorely needed festive cheer.

Comfort and joy

Over the next month or so, consumers will be seeking out extra comfort during the festive season and finding pleasure in the innocent delights of the selection box.

Last December saw an extra €6.7 million spent on chocolate confectionery, and Halloween 2021 has shown us the shape of things to come with an extra €2 million spent on confectionery over the 12 weeks up to October 31.

Even at that early stage the signs of Christmas shopping were very evident, according to Kantar retail analyst Emer Healy.

“With Christmas ads appearing on our screens earlier than ever, and retailers giving seasonal staples a prominent position on shelves, Irish shoppers are getting into the festive spirit,” she says.

“It seems everyone is looking for an excuse to celebrate and Christmas has certainly arrived in the supermarket aisles. With Christmas ads appearing on our screens earlier than ever, and retailers giving seasonal staples a prominent position on shelves, Irish shoppers are getting into the festive spirit.”

Grocery spend

Last year the average shopper spent €134 more on groceries in December than they did the previous year, with 23rd December turning out to be the busiest shopping day of the year when almost half the Irish population headed to the supermarket.

While some hospitality restrictions have returned, we’ll still be seeing office parties and Christmas nights out, but we can still expect to see plenty of customers recreating the party atmosphere at home. Last Christmas saw take-home alcohol sales soar by 33% and as we grow more accustomed to the new normal, we can expect lots of clinking of glasses around the fire.

Festive feasting

With most people staying in Ireland instead of jetting off elsewhere, we can expect increases in the big Christmas feasts, the foods that typically fill our plates, along with the drinks and snacks we munch on into the evening time.

According to polls, roast potatoes are consumers’ favourite savoury Christmas food, followed by traditional turkey. Yorkshire puddings, pigs in blankets and stuffing are also hugely popular, while most would happily leave cranberry sauce and Brussels sprouts off their plates.

We could again see a shift to smaller and alternative cuts with tighter guest lists – last year the traditional turkey was off the menu for many this Christmas as Irish households spent €938,000 more on turkey rolls, €398,000 extra on roast beef and an additional €480,000 on roast pork in December.

When it comes to sweet treats, it’s mince pies, Christmas cake, Christmas pudding and classic trifle that are consumers’ favourites.

We can also expect to see lots of that party food coming home as well, with customers alternating the big roasts and feasts with simple and festive treats, such as the ever popular  cocktail sausages, mini sausage rolls, mini quiches, mince pies, garlic mushrooms, cheese platters and chicken goujons that prove ever popular.

Remedies

Sales of over the counter medicines are expected to increase as shoppers aim to stay well over the festive period.

Consumers will stock up on heartburn and indigestion remedies in a bid to beat the inevitable overindulgence and they’ll also look to painkillers to help soothe any hungover heads or aches and pains.

We’re already seeing people focusing firmly on their health, with remedies for coughs and colds rising in October thanks to more mixing and socialising and a rise in seasonal bugs.

Sales of flu treatments soared by 56% and cough lozenges by 36% respectively in October.

Digital Christmas

Meanwhile, far-sighted grocery businesses that have invested in their digital side over the pandemic won’t be going far wrong.

Last Christmas, Irish households spent €133 million through digital channels, and digital orders accounted for 4.1% of all grocery sales in December.

New shoppers continue to dip their toes online, and we can expect digital sales to go from strength to strength this Christmas and in the months afterwards.

For full feature, click HERE.

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Earlier this month, the UFU had warned that retailers in Northern Ireland could face more limited supplies of pork and ham this Christmas due to the processing problems.

Deputy president WIlliam Irvine had warned that it may be necessary to cull healthy pigs if it proves impossible to get more throughput through processing factories, raising the danger that speciality product lines in stores could be more limited this Christmas.

Labour shortages

Following the latest visa news, Mr Irvine said: “After a long period of intense lobbying by the UFU, we are glad that finally, some positive progression has been made on the issue of labour shortages. 

“Processors across Northern Ireland have been seriously understaffed for quite some time now and this has been putting pressure on our farmers to house extra livestock as well as impacting their cashflow – especially when you take into account ongoing high feed prices.

However, while the movement on temporary visas is an encouraging start to help fill the vacancies in the processing plants and hopefully, help them to get back to the level of processing that is required, we fear it’s not going to fix the problem entirely, but it may be a start.”

Falls short

Mr Irvine warned that the number of temporary visas granted falls short of what is needed, but said the union appreciates the government making them available to workers outside the UK. 

“In the meantime, we will continue to engage at the highest level. Other food processing sectors must not be forgotten about as labour affects across the board,” he said.

“We will ensure that work continues to overcome this labour shortage completely and drive the industry away from a looming crisis.”

Earlier this month he warned that the labour shortage could hit consumer choice.

“They’re streamlining product in every way they can and delivering the most handy and speedy cuts, so consumer choice is going to be limited,” he said.

“Demand from GB is strong, so in the run-up to Christmas there will be a reduced number of lines.

“If you want a nice ham for Christmas I would buy it soon and have it in the freezer, rather than leaving it until Christmas Eve.”

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