Asda and Sainsbury's have seen their share of the Republic of Ireland grocery market collapse by 40% over the last year.

The duo had a market share of 1.7% in the first quarter of 2010, new research from Kantar Worldpanel shows, compared to 2.7% in the same period last year.

The fall came because shoppers decided to take advantage of the price war between retailers in the Republic, where like-for like-price deflation in March reached 7%.

The rise in Vat there has also brought prices closer to those of the Republic while customers here are also switching to supermarket own-label brands as a way of reducing their shopping bills further.

Asda and Sainsbury's market share plunged over the quarter after the average spend by shoppers heading north fell from €262.80 in the first three months of 2009 to €160.20 in the same period this year.

This is partly because the average basket spend by customer has fallen from €63.60 to €53 while the frequency of visits by each customer to Asda and Sainsbury's fell 25% compared to the same period last year.

Tesco has seen its share of the grocery market here rise from 25.7% to 26.8% over the last year, while Dunnes has remained relatively steady at 23.7% as has SuperValu at 20%.

The discounters continue to increase their market share, and now stand at 8.8%, up from 7.9% this time last year.

Their market share is also set to increase further as they are in an expansion mode, whereas most of the other market incumbents are in a “wait and see” situation.

Superquinn has seen its share of the market fall from 7.2% to 6.8% but Kantar Worldpanel says the customers it has lost are “less important” in terms of turnover. As a result, Superquinn is the only retailer to have seen an increase in the average spend per customer over the quarter, with each now spending more than €330, up from just under €280 in the same period last year.

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 consumers.