Sales are still up on 2020, although only by 1.3% as the comparison now includes the record demand for groceries before the first national lockdown in March 2020.

In the latest four week period sales have declined by 7.7%, with Irish shoppers spending €78.2 million less on take-home groceries.

Emer Healy, senior retail analyst at Kantar comments: “All our remaining COVID-19 restrictions have eased across Ireland and that’s making its mark on grocery sales. Not only are people heading back to the office, but they’re also enjoying returning to pubs, cafés, and restaurants, and as a result are picking up more food while on the go, rather than from the supermarkets.”

The end of restrictions has coincided with price rises across the high street, and grocery inflation now stands at 3.7% – the highest level since October 2013.

Emer Healy continues: “As spiralling costs bite at the heels of retailers and shoppers, supermarket prices are being pushed up. The number of products sold on promotion has dropped by 5.7% as the grocers look to mitigate supply chain pressures, and we’ve seen a marked increase in the average price of staples like bread, butter and toilet paper over the last 12 weeks.”

Inflation, rather than the pandemic, is now the main driver of changes to consumer behaviour in Ireland.

Emer Healy comments: “This is a stressful time for consumers and that anxiety is being felt on the shop floor. With promotions down, shoppers are focused on seeking out the cheaper alternatives. Private label’s share of the grocery market is on the rise and has grown by 1.2% since last year. Retailers’ own lines now account for 46.3% of total grocery sales. Headlines around shortages of pasta and flour have also seen sales of those products soar, with both categories boosted by 22% and 30% respectively during the month of March.”

This latest data period also marks two years since the first lockdown.

Emer Healy says: “It’s becoming clearer which pandemic grocery habits are here to stay. The growth of online shopping has been one of the most staggering shifts to shopper behaviour in recent memory, with all retailers now offering some form of online shopping. Since 2018, online’s share of the market has grown by 3.1 percentage points, a boost largely driven by couples without children who are natural converts to online technology.

“Since the same period in 2018, the proportion of this demographic buying online has nearly doubled, going from 14% to 26% in March 2022. By 2024, we estimate that online will hold a 6.6% share of total grocery sales – a figure which would have seemed crazy before COVID-19 came along.

“After months at home, it’s safe to say that we’re all a lot more comfortable flexing our culinary muscles and an increase in cooking from scratch remains reflected at the tills. Sales of home baking and home cooking ingredients continues to see strong growth, growing 14.6% and 20% respectively since 2019.

“Tea and coffee are another good example. Hybrid working means sales of hot beverages shot up by 23% over the latest period compared with pre-pandemic when we spent a lot more time in the office. Personal hygiene remains top of the agenda too. Sales of liquid soap are up 36% compared with 2019.”

All of the major retailers saw take-home grocery sales fall in the 12 weeks to 20 March 2022.

Emer Healy continues: “The competition between the grocers is ramping up as people hunt for the best deals. Those grocers with strong messaging on lower average prices and promotional offers are best placed to come out on top.”

Dunnes retains its position as Ireland’s largest grocer and holds a 22.4% market share this period. SuperValu has pipped Tesco to second place, with the retailers claiming a market share of 21.6% and 21.3% respectively. Lidl follows behind with a 13.0% share of the market, while Aldi holds 12.4%. 

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The spend on websites within Ireland was also more than the €329 spent buying goods on international sites, according to the survey of over 1,000 consumers.

Female respondents spent “considerably more” on Irish websites, with an estimated annual spend of €534, compared with €351 spent by male shoppers, the study found.

Meanwhile, Wicklow consumers spent the most with websites in Ireland, with an average of €972 in purchases last year.

Carlow came in second place with a spend of €915, with Meath third, racking up €819 in spending. Shoppers in Monaghan spent €773 while those in Offaly averaged €634.

While over three quarters of consumers surveyed spent money on international websites last year, people from Carlow spent the most money on international sites, with an average of €678.

This was followed by Wicklow with €561 – Offaly (€508), Longford (€450) and Kildare (€425).

The most popular non-Irish destination to buy from was the UK (74%), while 28% of people bought from China and 16% turned to websites in the US.

Meanwhile, 28pc of people bought from China and 16pc of respondents bought from websites in the United States.

Almost two thirds of Irish people say they plan to shop online more this year and nearly half of those surveyed said they would do all their shopping online if they could. Those aged 25-34 are most in favour of this at 54%, in comparison to a quarter of people over the age of 55 who said they would do all their shopping online if they could.

“It’s great to see how Irish people are prioritising their online spending on Irish businesses,” said Maeve Dorman, senior vice president at PayPal.

“There is a real opportunity for online retailers to make a difference, but businesses need to have an e-commerce platform in place that can meet their customers’ needs, wherever they are – online, on the go, or in-store.”

The study was conducted online by Censuswide, which surveyed 1,001 respondents across Ireland in November.

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The company says the decline reflects the fact that sales are still being compared against the extraordinary levels of shopping seen during the lockdowns in 2020, and spending remains 9.4% higher than in 2019.

Emer Healy, retail analyst at Kantar, comments: “It’s a nuanced picture in the grocery market at the moment.  The lifting of social restrictions and high vaccination rates mean shoppers are more comfortable going out and visiting physical stores, but they also mean people’s social calendars are filling up again.

“More socialising means we’re living less regimented lives, and with more eating at restaurants, pubs and on the go, the reliance which many had on supermarkets to get their meals last year is starting to fade.

“That is evidenced in the latest four week ending data, which shows supermarket trips are falling by 4.5% year on year and the amount bought per visit is also down 0.9%.”

Busier routines and less time to shop in store means that many people have turned to online shopping.  The latest four weeks saw online sales jump 7.1% year on year, adding €3 million to the market.

Loosening restrictions

The further loosening of social restrictions on 22 October is not expected to herald major changes for the grocery sector.

Emer Healy says: “The relaxation of restrictions in Ireland has been a gradual process and people have already been enjoying increasing freedoms, with knock-on effects at the supermarket tills.  We expect many office workers to continue to work flexibly, which will mean a mix of both in home and on-the-go eating at lunchtime.  People are already back visiting pubs and restaurants too, so there shouldn’t be a major change in that sector either.”

Shoppers are certainly eager to make the most of relaxed restrictions to enjoy calendar milestones this year.

“People will be making up for lost time with their Halloween festivities this autumn.  While there was no celebration in 2020, it looks like spooky season is back with a bang,” Emer Healy comments.

“Sales of pumpkins soared 32.1% over the past 12 weeks compared to last year, while sugar confectionery and share bags of chocolate are up 6.4% and 15.3% respectively, as people get ready for trick or treaters.”

Inflation

The past 12 weeks brought the highest levels of inflation in the grocery market since March 2021.  Prices are 0.6% higher than a year ago, with healthcare, hot beverages and frozen food the most affected categories – up 8.0%, 5.1% and 4.6% respectively.

Despite prices going up, consumer confidence is high.  Dunnes was the only retailer to recruit new shoppers this period as it and Tesco found favour through more premium items.

SuperValu continues to hold the largest share of the grocery market this month at 22.3%.  Its shoppers visited more frequently than any other retailer – on average 21 times in the past 12 weeks.

Aldi was boosted by store openings across the country and welcomed a second consecutive month with a record-breaking share – now at 12.8%.  It grew especially well in Connaught and Ulster, with sales up 6.9%, the strongest among all retailers.  Lidl held its share steady at 12.7% this period.

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