Tesco chief Tony Keohane: profit

Grocery prices have surged 4.2% in the last three months, according to new research from Kantar Worldpanel Ireland, despite consumers efforts to tighten their belts.

It also found the price of some Christmas favourites has increased significantly since 2009, with the cost of Christmas puddings up 17% and a packet of stuffing 12% more expensive.

However, consumers will pay 2.7% less for their Christmas turkey this year and heavy festive promotions have led to an 11% reduction in the cost of beer and lager and a 3% fall in the price of wine compared to last year.

"On top of price increases, the December budget cuts have added to consumer woes this month. In response to this, shoppers have reduced the size of their weekly shopping basket and continued to trade down to cheaper products, causing market growth to fall behind inflation," said David Berry, commercial director at Kantar Worldpanel.

"We're seeing this in growing sales of cheaper private label products which now capture a third of our grocery spend.

There is no sign yet of the traditional swing back to branded products in the run-up to Christmas."

Kantar Worldpanel Ireland's figures are based on more than 75,000 identical products which are compared year-on-year in the proportions purchased by Irish shoppers. It is a 'pure' inflation measure in that shopping behaviour is held constant between the two comparison periods so shoppers are likely to see lower price rises if they trade down or seek out more offers such as buy one, get one free.

The figures for the three months ending 28 November show that Tesco is continuing to profit from changes in the grocery market and has now cornered 27% of the market, up from 25.9% last year.

In addition Lidl and Aldi's share of the market is significantly ahead of last year. They grew their share of the overall market by 0.5% and 0.4% respectively. However, Dunnes and SuperValu have lost market share, the figures show, and Superquinn continues to be hit by shoppers trading down.

However, Asda and Sainsbury's share of the grocery market is down nearly 28% on the same period last year.