Aldi and Lidl make hay during downturn

Shoppers in the Republic are continuing to feel the squeeze with new data revealing that families are spending less on groceries and switching to the German discount stores in greater numbers than ever before.

The data from retail research group Kantar Worldpanel covering the 12 weeks to July 7th shows that grocery inflation is currently at 4.65 per cent, down from 4.82 per cent in the previous three-month period.

While prices are increasing at their slowest level this year, that rate of increase is still substantially higher than the general rate of inflation which stood at just 0.7 per cent in June.

The latest figures show shoppers with children are coming under particular pressure this year and while grocery prices are climbing, this cohort of shoppers is spending less.

"Although inflation is stabilising, price increases are nearly double the rate they were this time last year," according to the director of Kantar Worldpanel Mark Thomson.

“Consumers are responding by cutting back with families spending, on average over this year, €67 less than they did in 2012. As a result, we have seen the overall market decline by 0.2 per cent.”

He highlighted the strong performance of the discounters and predicted that Aldi’s and Lidl’s combined share of the Irish market would hit 15 per cent by the end of the year.

It is a different story for both Tesco and Dunnes with the two largest retailers in the State struggling in recent months.

Both have lost market share since last year, and Superquinn and Supervalu remain static.

Year on year, Aldi has been the big winner and it has seen its share of the Republic's grocery spending jump from 5.4 per cent to 7 per cent in the last 12 months, an increase of 27.3 per cent.

Lidl has also benefited from the downturn with its share of the market increasing significantly. It now commands 7.4 per cent of the market – up from 6.7 per cent last year.

Tesco remains the largest player in the grocery sector with a market share of 27.6 per cent although this is down from the 28.8 per cent it recorded over the same period last year.

Dunnes Stores has also seen its share of the market fall, from 22.2 per cent last year to 21.5 per cent in the 12 weeks to July 7th.

Superquinn’s numbers are static at 5.4 per cent, while Supervalu has seen footfall climb just 0.1 per cent to 19.5 per cent of the market.