Irish shoppers are switching to discount retailers Aldi and Lidl in record numbers as grocery price inflation drives increased spending in supermarkets.

Figures compiled by Kantar, the market monitoring company, indicate that while Dunnes and Tesco still hold the largest market shares, at 22.7% and 22.6% respectively, cheaper alternatives like Aldi and Lidl have seen “record share growth” in the last 12 months.

Overall, grocery sales have increased by 11.1% over the last year, however Kantar said inflation in grocery prices is “the real driving factor” behind this, rather than increased purchasing volume.

Its grocery market share report states that while grocery prices still increased by 14.7% in the 12 weeks to 9 July, the inflation rate is at its lowest this year.

Lidl and Aldi hold the lowest market shares, at 13.9% and 12.7% respectively. However, the stores’ year-on-year growth suggests that shoppers are voting with their feet when it comes to price inflation.

Additionally, shoppers are continuing to buy more own-label products compared to brand names – a trend which Kantar highlighted in May of this year – as shoppers “look to save money”.

Frequent trips

Lidl’s “record share growth” puts it on track to hold 14% of the market by the end of the summer, according to the monitor, while shoppers making more frequent trips Aldi “contributed an additional €41.6m to its overall performance”.

The grocery market share report suggests that customers are returning to stores more often and are purchasing fewer items at once, which Kantar’s Business Development Director at Emer Healy attributes to an uptick in people dining out over summer.

A slight fall in Dunnes’ market growth rate paired with a strong rate of customers returning, could suggest saving schemes – such as vouchers – are supporting its customer retention.

Price inflation

Last month, retail minister Noel Richmond said that he was hopeful non-food items will come down in price, after Tesco cut prices on 700 of their products.

While the price inflation rate is at its lowest this year, according to Kantar, it still only equates to a 1% drop. Healy said Kantar “expects to see further gradual decline over the coming months”.

Finance minister Michael McGrath told RTÉ last month that the public has seen a “significant spike in prices” over the last 18 months. Today’s report suggests the average annual increase to household spending has been €427.

With reporting from Mairead Maguire