The latest results from Kantar Worldpanel in Ireland, for the 12 weeks ending 18 March 2012, show the grocery market has slid back into decline following four months of modest sales growth.
The latest data shows that the sector has fallen in value by 0.5% when compared with the same period last year.
David Berry, commercial director at Kantar Worldpanel, explained: “For the past year any growth in the grocery market has been driven by price inflation, which has been running at an average rate of 3.8%. As competition between the main retailers has continued the level of inflation has dropped back over the past four months, with the latest figures showing price inflation of just 1.9%. Although a lower rate of price inflation is good news for shoppers, there is no immediate sign that this is changing their current shopping behaviour.”
According to the Kantar results shoppers are continuing to look for ways to control their spending and shoppers are increasingly buying retailer own label goods. This has placed pressure on branded items, which have seen a drop in market share from 54.1% to 52.9% in the past year.
Berry said: “Among the major retailers, the most noticeable change this month is a strengthened performance from SuperValu, lifting its share from 19.7% to 20%. This coincides with the launch of its comprehensive SuperValu own brand range – suggesting this was a good move by the retailer.”
Aldi continues to post the strongest growth, with sales increasing by just over 20%. Tesco and Lidl also continue to out-perform the market and gain share as a result.
Commenting on the CSO retail sales figures for February, which showed a fall of 1%, Stephen Lynam, director of Retail Ireland said that it showed a continuation of the dismal start to 2012.
Lynan said: “Consumers are still not spending. Overall, retail sales are down by 30% compared with the boom era. Consumer sentiment is weak and the outlook remains uncertain. The high cost of rents, rates, tax and labour are causing retailers real difficulties and depressing consumer demand. Action is needed on all these fronts, including a review of VAT returns at the end of the month. If the government’s target is not met, the 2% increase should be reversed.”
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