Grocery inflation soaring as prices increase and sales fall

Grocery inflation in Ireland is the highest it has been since October 2013 at 3.7%, according to new statistics released by data analytics company, Kantar.

Cost increases have pressured retailers to push prices up across the board, while the number of products sold on promotional offers has fallen by 5.7%, as retailers try to mitigate supply chain pressures, reports Kantar.

These price rises have coincided with the end of pandemic-related lockdowns, which is causing overall grocery sales to drop as more people consume a higher volume of their food intake on the go.

In the period between March 7 to April 3, 2022, take-home grocery sales fell by €78.2 million, a decrease that Kantar says can be linked back to the removal of Covid-19 restrictions. Healy commented:

There was also a 7.3% decrease in grocery sales in the 12-week period between December 20, 2021 to March 20, 2022, which all retailers experienced.

However, sales were still higher than in 2020 although only slightly, as the comparison includes a record-high demand for groceries before the national lockdown in March 2020.

Image source: Kantar
Image source: Kantar

Dunnes Stores has retained its position as Ireland's largest grocer holding a 22.4% market share, it's followed by SuperValu and then Tesco, with each claiming market shares of 21.6% and 21.3% respectively.

Lidl follows Tesco, with a 13% share of the market, while Aldi holds 12.4%.

According to Kantar, grocery inflation is now the main driver behind changes in consumer behaviour, as higher prices and fewer promotional offers push them to seek out cheaper alternatives such as own-brand products.

Kantar outlines that the pandemic has altered consumers' habits and it is unlikely that people will revert back to their pre-pandemic practices.

A significant growth in demand has led to all retailers in Ireland now offering some form of online shopping.

The proportion of the 'couples with no children' demographic that buys their groceries online almost doubled to 26% in March 2022. It is also estimated that by 2024, online shopping will hold a 6.6% share of total grocery sales.

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