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Cost of Living

Irish grocery prices have increased at their fastest pace this year in nearly a decade

To “mitigate supply chain pressure”, supermarkets are running fewer promotions, Kantar said.

IRISH GROCERY PRICES increased by 3.7% in the first three months of 2022 compared to the same period last year — the fastest pace of growth since October 2013.

According to data company Kantar, in an attempt “to mitigate supply chain pressures”, supermarkets are selling fewer goods on promotion (-5.7%), while the price of staples like bread, butter and toilet paper are ticking upwards.

At the same time, Kantar said the volume of supermarket sales over the 12-week period to 20 March had fallen by 7.3% compared to the same stretch in 2021.

Supermarket sales volumes ballooned in March and April of 2020 and in the early part of 2021 when the country was in lockdown.

“All our remaining Covid-19 restrictions have eased across Ireland and that’s making its mark on grocery sales,” said Emer Healy, senior retail analyst at Kantar.

“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.”

Inflation, rather than Covid-19, is now the main driver of changes to consumer behaviour, according to Kantar.

Irish consumer prices were on average 5.6% higher in February 2022 than in February 2021, mostly because of skyrocketing energy prices, according to the Central Statistics Office.

Petrol, diesel, natural gas and, consequently, heating and electricity prices had already risen sharply throughout the past 12 months before Russia invaded Ukraine in February, which has elevated energy prices even further.

Higher energy prices make it more expensive to make and deliver food. Supply chain and agricultural experts have also warned that higher food prices are inevitable as world markets grapple with the prospect of losing Ukrainian grain and Russian energy exports as the war continues.

“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,” Healy said.

“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.”

Meanwhile, despite the lifting of Covid restrictions, online grocery shopping seems to be a pandemic-era habit that is here to stay, Kantar said.

Since 2018, online’s share of total supermarket sales has grown by 3.1%, a boost largely driven by couples without children who are “natural converts” to online technology, according to Kantar.

Healy explained, “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.”

Today’s Kantar data also shows that at 22.4%, Dunnes Stores held the largest share of Ireland’s grocery market in the 12 weeks covered.

SuperValu was second with 21.6% while Tesco had 21.3%; Lidl had 13%; and Aldi had 12.4%. 

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