Signs of cautious optimism in grocery market

Kantar's latest figures compare last year's unprecedented summer weather with this year's`

Irish shoppers spent an additional €628.7m on grocery items this period

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29 June 2020 | 0

Take-home grocery sales in Ireland increased by 24.7% in the 12 weeks to 14 June 2020, the latest figures from Kantar show. Growth accelerated slightly in the most recent four weeks to 25%, just behind last month’s record level, as Ireland moves into the next stage of its lockdown.

“As restrictions start to ease, including the lifting of limits on travel, people are growing more confident and the number of shopping trips inched up slightly in the most recent four weeks, by 2.3%,” said Emer Healy, retail analyst at Kantar. “When in store, shoppers are continuing to buy more than in normal times and the average person has spent €204 extra this June than last year, on average €30.77 each trip.

While additional spend in the last 12 weeks added up to €628.7 million on grocery items, Kantar noted that some retailers may still be feeling the impact of a decline in other categories such as food on the go and clothing.

Online demand continued to soar in the last 12 weeks, with an additional 99,000 households receiving a delivery. An extra €70.9 million was spent online during the period, which is a year-on-year increase of 114.3%.

“Retailers will now be looking ahead and thinking how they can retain new online shoppers when things return to normal,” said Healy. “The answer to that is likely to be in different demographics – retired households for example, where their share of online grocery sales now sits at 14.1%.”

It appears that younger consumers have avoided ordering online to allow for more vulnerable groups to use the service, added Healy. “Nearly 40% of shoppers said this is the main reason they haven’t ordered groceries online during the lockdown. Despite the growth, it certainly isn’t the beginning of the end for bricks and mortar outlets – 63.6% of people still haven’t shopped online and don’t intend on doing so in the future.”

As people have continued to mark special occasions and socialise at home or in open public spaces during lockdown, alcohol sales have grown. “Staying in is the new going out,” said Healy, “and take-home alcohol sales continue to boom as a result – up 93% in the most recent four weeks. In the week leading up to the June Bank Holiday shoppers spent an additional €60 million on take-home grocery categories, and a third of that was on alcohol.”

With many restaurants closed, people have been recreating their favourite meals at home. As such, sales of ingredients such as curry pastes, coconut milk and Mexican meal kits were collectively 34% higher this month.

“Brunch lovers pushed bacon sales up 25%, eggs up 36% and sausages up 35% year on year,” said Healy. “People are also starting to enjoy the freedom of meeting friends and family outside of their home and picnic favourites were in high demand. Compared with last year, sales of dips were up 25%, soft drinks 42% and crisps 52%.”

An update on the grocers

Over 40% of Irish shoppers are now shopping closer to home and independent outlets are benefiting from this – growing sales by 44.8% during the 12-week period. People are depending on local suppliers more and they spent an additional €2.4 million at greengrocers and €11 million at butchers compared with the same period last year.

SuperValu continued to feel the advantage of its large store estate combined with this change in shopper behaviour. It held the highest share of the market at 22.9% and achieving the fastest year-on-year growth of 35.2% during the latest 12 weeks. SuperValu also remained the only retailer not to experience reduced footfall in the last 12 weeks and welcomed an additional 53,000 shoppers into its stores.

Elsewhere, Tesco’s sales grew by 22.2% to hold an 21.5% share. Consumers significantly increased the amount they bought each trip – picking up five additional items with each visit and spending more as a result.

Dunnes Stores customers also added more to their baskets during this period – an additional five items per trip and spent an extra €14.23 per trip compared with last year, generating strong overall growth for the retailer of 15.4%.

Lidl boosted its sales by 29.7%, while Aldi’s were 20.4% higher than last year, generated by customers doing larger shops with both retailers. Lidl continued to experience its strongest growth in Dublin and Aldi from Munster.

“There are indications of cautious optimism in Ireland,” added Healy. “Despite the months of lockdown, 40% of Irish consumers say they feel financially comfortable and that’s reflected in how they are shopping.  With some of the usual ways to treat themselves off limits, they are trading up to branded goods in store, spending an additional €381 million on these products compared with last year.”

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