'Welcome news' for Irish shoppers as grocery price inflation falls

Grocery price inflation has slowed again, prompting possible good news on the reduction of prices in supermarkets. 

Compared to May 2023, when grocery inflation hit its highest peak of 16.5%, a slight decline in average prices on essential lines is being seen, according to the latest data from Kantar.

Take-home grocery sales in Ireland increased by 6.8% in the four weeks to 6 August 2023 as the average price per pack soared 8.8%.

Compared to last year, shoppers were in the store more often during August, up by 2.7%. However, there was a slight drop in frequency of trips month-on-month, down by 0.5%, from 20.1 shopping trips in July to 19.6 in August.

Grocery price inflation is the driving factor behind the increase in sales rather than increased purchasing. However, while grocery inflation rose by 12.8% in the 12 weeks to 6 August, it was down on last month and is the lowest level since November 2022. 

Emer Healy, Business Development Director at Kantar, said: "This is the lowest level we have seen over the past 10 months, and we expect to see a continued gradual decline in inflation rates over the coming months".

"This is the third month in a row where there has been a drop in grocery inflation, which is welcome news for Irish consumers, although the rate is still incredibly high. Compared to last month’s grocery inflation rate of 14.7% there has been a significant drop of 1.9 percentage points.

"This is the lowest level we have seen over the past 10 months, and we expect to see a continued gradual decline in inflation rates over the coming months," Ms Healy added.

The good news is that the slowdown in grocery inflation is starting to come through in prices on the shelf, according to Kantar.

Compared to May 2023, when grocery inflation hit its highest peak of 16.5%, we are starting to see a slight decline in average prices on essential lines. As a result, we are spending €0.36 less on butter, milk and cheese combined.

The percentage of packs sold on promotion declined by 2.8 percentage points versus 2020, while the percentage of sales sold on promotion stands at 24.8% which is down slightly on last year 0.2 percentage points. With fewer items on promotion, Irish shoppers are looking out for the best deals in the market. 

Own label goods remain popular, with sales up 13% in the last 12 weeks, compared to brands at 5.7%. For the third consecutive month, own label retains a higher share of the market than brands, hitting a value share of 48.1% compared to branded share at 46.3%. 

Buying own label lines is one of the ways in which Irish consumers have been trying to save money at the tills and we can see the impact of this on their spend.

The average increase in the household weekly grocery shop is €9.10 compared to last year, well below the extra €17.80 shoppers would have paid if they bought the same items 12 months ago based on the current rate of inflation.