As the grocery market continues to contract, the real winners in the past 12 months have been the German discounters, Aldi and Lidl.
Not only have they gained more customers, they have succeeded in holding their average spend per buyer at 2008-2009 levels, albeit off a lower base than the more mainstream retailers.
There are several reasons for this success. Firstly, the discounters are recession-friendly and have a clear value message that resonates well in a downturn.
There is also the matter of their enlarged retail footprint – in other words, the way they have achieved critical mass in the marketplace. Both Aldi and Lidl have now been in Ireland more than ten years, and thanks to an aggressive expansion policy, they now have shops within easy access of most Irish households.
This has helped increase acceptance of the discount format, with market data showing that almost all Irish consumers (including ABC1 shoppers) have tried either Aldi or Lidl at some stage.
Arguably the main driver of growth, however, is advertising. Neither Aldi nor Lidl spends as much on media buying as Tesco or Dunnes, for example, but their respective media budgets, relative to their overall market share, are far higher than those of the bigger players.
This may be a more costly strategy, but it has worked well to date, especially the focus on brochures and flyers over print or television ads.
Indeed, many within the industry believe newspaper advertising is more about inter-supermarket rivalries than attracting new shoppers, so it could be argued that brochures are a far more effective mechanism for communicating their brand propositions.
With the combined discounter share growing by almost one full percentage point in the last year (from 7.9% to 8.8%), the real question is when the growth will start to tail off. As it stands, none of the mainstream players is opening any new shops, meaning that a continued expansion of the discounter estate (at current rates of around 10-15 supermarkets each a year) would make a 10% market share by the end of 2012 quite optimistic but not unfeasible.
Hitting 10% (combined) would be a considerable achievement for two companies which are still very new entrants to the market. However, it would also create a new set of challenges.
To date, the discounters' struggle has been to take customers from the established supermarkets. However, as their footprint expands across the country, shoppers are now in a position not just to choose between Tesco and Aldi, but also to pick which discounter they prefer.
There is also the threat from new discount formats such as the Barry Group's Buy Lo franchise model, which promises to have ten shops open by the end of this year, while other international discount formats are closely monitoring the Irish market for opportunities.
As a result, stage two of the discounter story will not be about discounters versus mainstream players, but rather discounter versus discounter.
John Ruddy is editor of grocery trade magazine 'Checkout' and its weekly Retail Intelligence news service