Grocery inflation drops to lowest rate since November 2022

August 23, 2023

Grocery inflation rose by 12.8% in the 12 weeks to August 6 – the lowest level of growth since November 2022 and the third drop in a row, new figures from Kantar show.

Kantar said that take-home grocery sales in Ireland increased by 6.8% in the four weeks to August 6 as the average price per pack soared 8.8%.

Compared to the same time last year, shoppers were in the store more often during August, up by 2.7%.

But it noted a slight drop in frequency of trips on a monthly basis – down by 0.5% from 20.1 shopping trips in July to 19.6 in August.

Emer Healy, Business Development Director at Kantar, said that while the rate of grocery inflation is still “incredibly high” it saw a significant drop in August from a rate of 14.7% in July.

“This is the lowest level we have seen over the past 10 months, and we expect to see a continued gradual decline in inflation rates over the coming months,” she said.

The slowdown in grocery inflation is also starting to come through in prices on the shelf. Compared to May, when grocery inflation hit its highest peak of 16.5%, a slight decline in average prices on essential lines has been seen.

Own label goods remain popular, with sales up 13% in the last 12 weeks, compared to brands at 5.7%.

For the third consecutive month, Kanar said that own label retains a higher share of the market than brands, hitting a value share of 48.1% compared to branded share at 46.3%.

“Buying own label lines is one of the ways in which Irish consumers have been trying to save money at the tills and we can see the impact of this on their spend,” Emer Healy said.

“The average increase in the household weekly grocery shop is €9.10 compared to last year, well below the extra €17.80 shoppers would have paid if they bought the same items 12 months ago based on the current rate of inflation,” she added.

Today’s figures show that the very wet weather in July Ireland impacted sales of the usual summer favourites.

Shoppers spent €493,000 less on chilled burgers and grills and €1.3m less on chilled prepared salads year-on-year. They also spent €2.5m less on ice cream and a combined €2.3m less on fruit squash and mineral water.

But sales of take-home confectionery and take-home savouries rose €4.7m and €2.6m respectively.

The unseasonal weather also meant consumers looked for “warmers”, spending an additional €2.8m on soup and hot beverages.

Kantar noted that cooler temperatures and a wetter than average month may have also put people off from venturing the shops. Footfall was down for the fifth month in a row with people making 882,000 fewer trips than last month.

Meanwhile, Dunnes, Tesco and Lidl all grew ahead of the total market in terms of value this month.

The gap between the top three retailers continues to close with Tesco and Dunnes holding the combined highest share.

Dunnes holds a 22.6% market share with growth of 12.7% year-on-year. Kantar said the growth was on the back of shoppers returning to store more often, up 4.2% year-on-year, along with winning new shoppers.

Tesco also holds 22.6% of the market with growth of 12.6% year-on-year. Tesco had the strongest frequency growth amongst all retailers again, up 16.9% year-on-year, contributing an additional €98.8m to overall performance.

SuperValu holds 20.9% of the market with growth of 5.8%. SuperValu shoppers make the most trips in store when compared to all retailers, 22.2 trips on average, which is up 5.8% year-on-year.

Lidl holds 13.8% share with growth of 12.7% year-on-year. More frequent trips contributed to an additional €40.9m to overall performance.

And Aldi holds 12.6% with growth of 7.7% year-on-year thanks to a strong boost in new shoppers and more frequent trips, contributing an additional €34.6m to overall performance.

Article Source: Grocery inflation drops to lowest rate since November 2022 – RTE

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