Sales of own brand grocery goods in Irish supermarkets have doubled since 2000, but customers are moving away from retailer's premium own-brand lines as confidence in the economy falls.
TNS Worldpanel research found the main driver of the growth in own brand sales was Tesco and own brand goods now account for just under 31% of the total take home grocery market.
TNS Worldpanel said last year customers were switching to premium own-label goods during the year, however since the beginning of 2008, there has "been a marked change in trend with shoppers now switching out" of that sector. Customer across the supermarket chains are instead opting for branded and standard own-brand goods rather than premium own-brand lines.
TNS Worldpanel managing director Marie Burke said this showed shoppers were willing to drop down one level to standard private labels, as own-brand is known in the grocery industry, but "so far we have not seen much switching to the value private label lines despite the emphasis of supermarkets".
According to its research each household now spends more than €6,100 annually on groceries, up 5% on this time last year. It found a basket of 85 of the most commonly bought grocery stock keeping units (SKUs) now costs more than €182, up from nearly €168.50 last year, an increase of 8.1%.
TNS Worldpanel's figures do not include the convenience market and are solely based on take-home goods. They value that sector at €9.3bn annually and their figures are based on 3,000 households who scan everything they buy on a weekly basis on their return home. The 3,000 households are spread geographically and demographically to reflect national statistics.
Households are also making more shopping trips and now shop on average with 2.5 of the top five grocery retailers each month which, Burke said, meant they were responding to the special offers from retailers. As a result, more shoppers are waiting until adverts appear in the Sunday newspapers highlighting these offers before doing their shopping. Sunday trading is down and trading on Monday is up, 40% of which is due to the adverts, according to TNS Worldpanel.
Its figures show discounters Aldi and Lidl have opened more than 100 new stores since 2003, trebling their outlets to 152 in the Republic of Ireland. Aldi now has 52 outlets here with Lidl operating 100. The discount retailers' growth is such that the quarter between May and August was the first time they surpassed Superquinn's market share.
The research also shows Lidl and Aldi's customers are more likely to shop in another store on the same day with 53% of Aldi's customers and 49% of Lidl's customers doing so. In addition, customer spending there is lower than in other retailers meaning householders are not doing their full shop there. Part of this is due to the fact the discounters have less fresh and chilled categories than other retailers and despite the fact they have been focusing on increasing their fruit and vegetable offering, fresh meat is an area "they have not yet penetrated".
The discounters' expansion is part of a wider trend. Dunnes has nearly doubled its store numbers from 66 to 98 since 2003. Tesco now has 107 outlets, up from 79 in 2003, while Superquinn has 23 stores, up from 19 in 2003. SuperValu has also added more stores and now trades from 184 locations, up from 162 in 2003.
"The doom and gloom is not as bad as the media is making out," Burke said, pointing out that people are still consuming roughly the same amount of goods but there has been a slight reduction in non-food volume. The fact consumers are buying the same variety of goods suggests they are "not yet making drastic changes to their shopping", she said, and are "unwilling to cut back on all of the possibly unnecessary products they have gotten used to buying as we have not seen a significant drop in penetration for any one market".