Grocery inflation slows again but supermarket prices are still going up

The cost of groceries climbed by 10.5 per cent in the three months to the beginning of October when compared with the same period last. year, according to the latest data from retail analysts Kantar.

It is the fifth month in a row that inflation in Irish supermarkets has fallen, with the current rate the lowest recorded since September 2022.

While prices are still climbing significantly, Kantar’s Emer Healy was upbeat about the prospects of a further softening of inflation in the months ahead.

Describing the fall from 11.3 per cent recorded last month as “welcome news”, she said there was “promise in the current trajectory”, although she noted that “the fact is that inflation still remains high”.

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She highlighted a drop in the level of sales sold on promotion. “Back in 2020, 27.7 per cent of sales were on promotion versus 24.4 per cent this year.

“With current levels of grocery inflation in the market, unless consumers make changes to their shopping habits, the average annual grocery bill is set to rise by €176 from €1,677 to €1,853,” she noted.

The fresh data suggests that own-label goods remain popular, with sales up 11.5 per cent compared to brands, which have grown by 5.1 per cent.

Value own-label ranges recorded the strongest growth at 13 per cent, with Irish shoppers spending an additional €7.7 million year-on-year in a bid to save money and control how much they are spending.

Own label now holds a 47.9 per cent share, with the so-called branded value share at 46.8 per cent, which was the highest share seen for branded products since June 2022.

Warmer weather in recent weeks meant purchases of winter staples were put on hold while barbecues stayed out longer than usual and more ice-creams and salads than might have been expected were bought, Ms Healy said.

“But with Halloween fast approaching, shoppers were unable to avoid supermarkets filled with seasonal treats and spent an additional €3.9 million on take-home confectionery,” she added.

[ Tesco raises profit outlook as food inflation eases ]

Online sales remained strong over the 12-week period, up just over 25 per cent year-on-year, with shoppers spending an additional €36.1 million online, with almost one in five Irish household’s purchasing their groceries online.

The value of take-home grocery sales in Ireland increased by 8.5 per cent in the four weeks to the beginning of this month, with shoppers visiting stores more often and making an average of 20.5 trips.

As consumers look for ways to manage household budgets, volumes per trip continued to decline compared to last year, down 7.3 per cent, with shoppers picking up on average one pack less per month.

Dunnes was the most popular supermarket in Ireland with a 23.3 per cent market share, up 10.5 per cent year-on-year. Tesco holds 22.5 per cent of the market with growth of 11.3 per cent year-on-year. SuperValu remains in third place on 20.6 per cent.

Lidl has 13.5 per cent of the market while Aldi is on 12.3 per cent.