The Irish grocery market has slipped into deflation for the first time in almost two years, according to Kantar Worldpanel.

The market reported a month-on-month decrease of 0.7%, bringing the total to -0.2%, the latest figures for the 12-week period (ending March 26) show.

It is only now the market is starting to feel the affect of the weakened pound, following the EU referendum as the price of British imports drops, Director of Kantar Worldpanel, David Berry, said.

“For the first time since May 2015 grocery prices are falling, so consumers are likely to have a little extra cash to hand, though this doesn’t necessary mean they’ll spend more in store.

Many will see the break from inflation as a chance to cut down their grocery costs and pocket the savings instead.

Meanwhile, Supervalu has regained the title of Ireland’s largest grocer having been pipped to the post by Dunnes Stores for the past two months, he added.

“The battle to attract shoppers remains as fierce as ever, as Supervalu makes its way back to the number one spot.

“After two consecutive months at the top, Dunnes was unable to remain Ireland’s largest supermarket for a third month with Supervalu finishing 0.3% ahead,” he said.

Latest trends

The latest figures reflect the impact of Easter on consumers and retailers alike, according to Kantar.

With the Easter weekend not until the middle of April this year; the holiday falls outside the latest 12 weeks, while it was within the comparable period last year, it added.

As a result, overall growth in the market fell to 0.7%. This is significantly below the level during the same period in 2016; demonstrating Easter’s significant boost to the market, Kantar said.

The recent return to deflation is also believed to have contributed to the slowing of growth.

Kanatar outlined that one of the main trends within the Irish grocery market this year is shoppers’ move towards own-label products.

These goods now account for 54% of total grocery spend – up 6% in the past four years, it added.

Discount retailers Aldi and Lidl are reportedly a major contributing factor.

Their stock is predominantly own-label so they have driven this growth, with shoppers now also more accustomed to seeing own-label ranges on shelves, Kantar said.

Irish supermarkets

SuperValu and Tesco have both responded and expanded their own-label ranges, Berry said.

“The retailers see this as a real opportunity for growth, with own-label lines offering them the chance to set themselves apart from the rest.

“However, [big] brands are still dominating in Dunnes Stores, with own-label accounting for just 38% of sales this year – up only 1% since 2013, much lower than its competitors,” he said.

Supervalu registered a market share of 22.6% – a drop of 0.5% compared to the same period last year.

In second place, Dunnes Stores had a market share of 22.3%. This increased by 0.5%, compared to the same period in 2016.

The top three were rounded out by Tesco. The retailer recorded a market share of 21.2%, a drop of 1% in the space of 12 months.

Lidl experienced a 3.7% increase in sales. Shoppers visited the store once more over the past 12 weeks, compared to the same period last year, according to Kantar.

Aldi remains Ireland’s fasting-growing retailer with sales growing by 5%. The retailer increased its market share to 11.3% – closing the gap with its closest rival Lidl to just 0.1%.