Aldi and Lidl, along with Tesco, are the supermarkets to have made gains over the past year

Comparing the first quarter of this year with the same period last year highlights the fundamental shift that has taken place in the grocery market since the onset of the recession. This is best illustrated by the average shopping trip made by the Irish household. In 2009 the average basket contained 12 items and had a value of €23. This year the number of items has increased to 13 but the value has declined by 7% to €21.50.

This saving on groceries has been a clear bright point for shoppers during the gloom of recession and falling household incomes. The amount we spend as a household has reduced by 7.5% over the last year, saving us each €450.

This change is underpinned by a significant decline in the price consumers pay for their groceries, with like-for-like price deflation reaching 7% in March. In addition to saving money by buying the same products for less, shoppers have also adopted coping strategies to further cut their grocery expenditure. The average price paid per item has dropped by more than 11%, a greater fall than the level of deflation. Shoppers have actively traded down to lower-priced product tiers, with own-label products becoming much more widely adopted. Over a third of our grocery shopping is now made up of own-label products, with all retailers increasing their own-label offer over the past year.

The worst-hit areas have been categories such as toiletries, homecare and alcohol. These are high-value categories and have traditionally been dominated by major brands. Shoppers have been able to save considerable money by changing their habits here and switching to cheaper alternatives.

From a retailer's perspective, the past year really has been the perfect storm. More than ever, consumer choice has been driven by price and promotions, with shoppers having more time and need to shop around for the best deal. On top of this, the decline in the value of sterling has added the threat of cross-border shopping to the growing presence of Aldi and Lidl, with both supermarkets continuing to open new outlets. This highly competitive environment has forced retailers to cut prices, moving their own business into value decline.

Indeed, the data shows that Aldi and Lidl are the only retailers to have seen any increase in value sales, lifting their combined share of the market by just under one percentage point to 8.8%.

The only other retailer to have increased share this quarter is Tesco. Having suffered due to cross-border price comparisons during 2009, Tesco responded by reducing prices across its store portfolio. While it took some time for the real benefit of this to come through, the retail giant is now fast building momentum in the marketplace and we anticipate this continuing throughout 2010.

SuperValu has performed in line with the market, holding its share amid fierce competitive pressure. It has continued to invest significantly in advertising, offering consumers a very clear message around 'Real Food, Real People'. The remainder of 2010 is likely to prove a greater challenge, with a resurgent Tesco adding to the pressure from Aldi and Lidl.

Looking back to late 2008, Dunnes Stores achieved a significant jump in market share by offering its Club Card-holders generous savings when they spent set amounts. When this level of activity was not repeated during 2009 it led to a significant decline in sales. This means the latest data is the first time we have been able to see a true year-on-year performance comparison. From this we see that Dunnes' performance is in line with the market, comparable to that of Supervalu but significantly behind Tesco. There is now a real need for Dunnes to create a compelling consumer offer to combat Tesco's share growth during the remainder of 2010.

Due to its expertise in the fresh and chilled categories, Superquinn has traditionally been used as a repertoire shop by many shoppers. Consumers buy many staple products in more mainstream shops and then add fruit, vegetables and meat from Superquinn. The increased level of shopper promiscuity since the recession began has hit Superquinn particularly hard, reducing its share of the market from 8% to 7% over the past two years.

Despite the falling sales among most retailers and manufacturers, there are one or two potential bright spots on the horizon. In the first three months of 2010 there has been a levelling of the trend among consumers for shopping around, with a move back to less frequent, larger shopping trips. This points to shoppers accepting that prices have reduced across the marketplace, with less need to hunt out the cheapest offer. This would provide a more certain platform, allowing retailers and manufacturers to offer a more attractive in-store proposition aimed at rebuilding lost loyalty.

David Berry is business group director at Kantar Worldpanel (formerly TNS). Kantar Worldpanel's figures are based on a basket of more than 200 grocery categories and are not taken from till receipts. Its figures include only those goods taken home by shoppers