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Discount Retailing - Ireland - September 2010

Irish perceptions of discounter retailers are changing. The recession has forced many consumers to cut their food budgets, and thus more are shopping in discounters. First-hand experience has seen attitudes towards discounters improve between 2008 and 2010.

However, as economic commentators claim to see an end to the recession on the horizon, discounters face a tough challenge to retain their new customer base, as pre-recessionary trends towards premium-positioned products begin to creep back into the Irish shopping basket.

Can rock-bottom pricing tactics maintain brand loyalty, or will discounters need to evolve to stave off the advances of mainstream supermarkets?

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Table of contents

  1. Issues in the Market

      • Key themes in the report
        • Definition
          • Definition of discounters
            • Consumer
              • Data sources
                • Abbreviations
                • Insights and Opportunities

                  • Discount free-from products
                    • Green fingers
                      • Customer retention a key objective
                      • Market in Brief

                        • Discounters benefit as consumers cut back
                          • Discounter brand star rises
                            • Mainstream supermarkets fight back
                              • Innovating to compete
                              • Fast Forward Trends

                                  • Trend 1: Generation Name Game
                                    • What’s it about?
                                      • What we’ve seen
                                        • What next?
                                          • Trend 2: Brand Name Games
                                            • What’s it about?
                                              • What we’ve seen
                                                • What next?
                                                • Internal Market Environment

                                                  • Key points
                                                    • The debt burden sees consumers seeking alternative shopping options
                                                      • Figure 1: How consumers have reassessed their lifestyles due to the recession, NI and RoI, April 2010
                                                    • Discounters make eating in cheaper
                                                      • Figure 2: Consumers who agree with the statement ’I’ve been shopping at discounters (eg Lidl) more during the recession’, NI and RoI, May 2010
                                                      • Figure 3: Agreement with shopping statement ’I am a bargain hunter’, NI and RoI, 2004-09
                                                    • Cutting back on personal debt and increase in bargain hunting
                                                      • Figure 4: Agreement with shopping statements, NI and RoI, 2004-09
                                                    • Irish food prices among highest in Europe
                                                      • Record food inflation may see more consumers turning to discounters
                                                        • Figure 5: Consumer Price Index, July 2009-July 2010
                                                        • Figure 6: Changes in food price (raw materials), 2009-10
                                                      • Higher food prices drive cross-border shopping
                                                        • The effects of discounters on brand power
                                                            • Figure 7: Agreement with shopping statement ’On the whole I think well-known brands are better than a shop’s own-brand’, NI and RoI, 2004-09
                                                          • Recession encouraging consumers to take a chance
                                                              • Figure 8: Agreement with statements relating to trying new things, NI and RoI, 2008 and 2009
                                                            • A segment of consumers still opt for familiarity
                                                              • Improving the brand image of discounters
                                                                • Customer satisfaction key to building discounter brand names
                                                                  • Ample car parking a requirement
                                                                    • Figure 9: Shopping for food, drink and household products, by type of transport used, NI and RoI, 2009
                                                                • Broader Market Environment

                                                                  • Key points
                                                                    • Economic growth might slow growth of discounters
                                                                      • Figure 10: Economic outlook, NI and RoI, 2008-10
                                                                    • End of the Aldi effect?
                                                                      • Figure 11: What consumers are looking forward to once the recession is over, NI and RoI, April 2010
                                                                    • Low confidence helped boost visits to discounters
                                                                      • Figure 12: Consumer Sentiment/Confidence Index, April 2007-10
                                                                    • Higher unemployment could boost sales for discounters
                                                                      • Figure 13: Unemployment rate, RoI, January 2008-March 2010
                                                                      • Figure 14: Unemployment rate, NI, December 2006-February 2010
                                                                    • The UK emergency budget
                                                                      • Lower corporation tax for NI on the cards
                                                                        • Cross-border shopping rises…
                                                                          • Figure 15: Food items bought by consumers when cross-border shopping, RoI, June 2009
                                                                        • …and falls
                                                                          • Older consumers attracted to discounters
                                                                            • Figure 16: Consumers who regularly shop in Lidl, by age, NI and RoI, May 2010
                                                                            • Figure 17: Consumers who regularly shop in Aldi, by age, RoI, May 2010
                                                                        • Market Value and Forecast

                                                                          • Key points
                                                                            • Food sales decline in 2010
                                                                              • Figure 18: All grocery retail sales, all-Ireland, RoI and NI, 2004-14
                                                                            • Smart shopping taking its toll on food market value
                                                                              • Higher footfall into discounters but lower value of sales
                                                                                • Figure 19: Estimated retail sales of discounters, all-Ireland, RoI and NI, 2004-14
                                                                              • NI discounter market growing year on year
                                                                                • Figure 20: Indexed value of all grocery retail sales versus. discounter food grocery retail sales sales, NI, 2004-14
                                                                              • Cross-border shopping did not benefit NI discounters
                                                                                • Figure 21: Cross-border shoppers who visited selected food retailers when cross-border shopping, RoI, June 2009
                                                                              • Renewed confidence might see future stagnation
                                                                                • Figure 22: What consumers are looking forward to once the recession is over, NI and RoI, April 2010
                                                                            • Competitive Evaluation of the Groceries Market

                                                                              • Key points
                                                                                • Food retailing market dominated by multiples and symbols
                                                                                  • Figure 23: Breakdown of food retailing market, by segment, NI and RoI, 2009
                                                                                • A simple business model
                                                                                    • Figure 24: Typical discounter business model
                                                                                  • Aldi
                                                                                    • Lidl
                                                                                      • Multiples dominant force in Irish food market
                                                                                        • Figure 25: Estimated grocery retail sales of mainstream supermarkets, all-Ireland, RoI and NI, 2004-10
                                                                                      • More competition from the ‘big boys’
                                                                                        • Asda
                                                                                          • Dunnes
                                                                                            • Sainsbury’s
                                                                                              • Superquinn
                                                                                                • SuperValu
                                                                                                  • Tesco
                                                                                                    • Frugal living takes its toll on symbol groups
                                                                                                      • Figure 26: Estimated grocery retail sales of convenience stores, all-Ireland, RoI and NI, 2004-10
                                                                                                    • Musgrave
                                                                                                      • Henderson Group
                                                                                                        • Local and health-oriented branding to compete
                                                                                                        • Strengths and Weaknesses

                                                                                                          • Strengths
                                                                                                            • Weaknesses
                                                                                                            • Who’s Innovating?

                                                                                                              • Key points
                                                                                                                • Recession fuels discounter brand innovation
                                                                                                                  • Figure 27: New discounter product launches in the UK and Ireland, 2004-10
                                                                                                                • Brand spanking new
                                                                                                                  • Figure 28: New discounter product launches in the UK and Ireland, by launch type, 2004-10*
                                                                                                                • High meat product innovation
                                                                                                                  • Figure 29: New discounter product launches in the UK and Ireland, by sub-category, 2004-10
                                                                                                                • Health-related trends on the rise at discounters
                                                                                                                  • Figure 30: Ten most popular discounter brand claims, 2005-10
                                                                                                                • Discounters expanding their non-food offering
                                                                                                                  • Lidl enters car business
                                                                                                                    • Lidl launches its own online DVD rental service
                                                                                                                      • Aldi suits up
                                                                                                                        • Discount holidays on the horizon
                                                                                                                        • Where Do Irish Consumers Shop?

                                                                                                                          • Key points
                                                                                                                              • Figure 31: What regions that selected retailers operate in, NI and RoI, 2010
                                                                                                                            • Tesco the most popular retailer
                                                                                                                              • Figure 32: Retailers consumers shop in on a regular basis (once a month or more), NI and RoI, May 2010
                                                                                                                            • Tesco the preferred supermarket
                                                                                                                                • Figure 33: Consumers who shop in Tesco on a regular basis (once a month or more), by age, NI and RoI, May 2010
                                                                                                                              • Lidl the clear contender for discounter throne
                                                                                                                                  • Figure 34: Consumers who shop in Lidl or Aldi on a regular basis (once a month or more), NI and RoI, May 2010
                                                                                                                                  • Figure 35: Consumers who shop in Lidl or Aldi on a regular basis (once a month or more), by social class, NI and RoI, May 2010
                                                                                                                                • Cheap and cheerful, or impersonal and unappealing?
                                                                                                                                  • Figure 36: Personalities of various food retail brands – Lidl and Aldi, UK, July 2009
                                                                                                                                • Irish image boosts usage of Dunnes in RoI
                                                                                                                                • Important Factors When Shopping

                                                                                                                                  • Key points
                                                                                                                                    • Value for money the most important factor when shopping
                                                                                                                                      • Figure 37: Agreement with statements relating to grocery shopping, NI and RoI, May 2010
                                                                                                                                    • Value versus quality
                                                                                                                                      • Figure 38: Consumer agreement with selected shopping statements, NI and RoI, May 2010
                                                                                                                                    • Perceptions of low quality in discounters changing
                                                                                                                                      • Figure 39: Consumer agreement with selected shopping statements relating to discounters, NI and RoI, May 2010
                                                                                                                                    • Recession boosting discounter business
                                                                                                                                      • Figure 40: Agreement with the statement ’I’ve been shopping at discounters (eg Lidl) more during the recession’, by gender and age, NI and RoI, May 2010
                                                                                                                                    • Wide range of products important
                                                                                                                                      • Figure 41: Agreement with the statement ’The range of products and brands in discounters is too limited’, NI and RoI, May 2010
                                                                                                                                    • Brand name important to a fifth of consumers
                                                                                                                                      • Figure 42: Agreement with the statement ’I prefer to buy well-known branded goods’, NI and RoI, May 2010
                                                                                                                                    • Reaching out online
                                                                                                                                      • Figure 43: Percentage of consumers with a broadband internet connection at home, NI and RoI, 2004-09
                                                                                                                                  • Consumer Target Groups

                                                                                                                                    • Key points
                                                                                                                                      • NI target groups
                                                                                                                                        • Figure 44: Consumer target groups, NI, May 2010
                                                                                                                                      • Bargain Hunters
                                                                                                                                        • Unchanged
                                                                                                                                          • Dabblers
                                                                                                                                            • Value-Led
                                                                                                                                              • RoI target groups
                                                                                                                                                • Figure 45: Consumer typologies, RoI, May 2010
                                                                                                                                              • No Change
                                                                                                                                                • Recession Discounters
                                                                                                                                                  • Discounter Enthusiasts
                                                                                                                                                    • Value Seekers
                                                                                                                                                    • Appendix

                                                                                                                                                      • Broader Market Environment
                                                                                                                                                        • Figure 46: Number of private households, by composition, RoI, 2002 and 2006
                                                                                                                                                        • Figure 47: NI and RoI population, by gender, 2006-20
                                                                                                                                                        • Figure 48: Forecast population, by age, NI, 2000-20
                                                                                                                                                        • Figure 49: Forecast population, by age, RoI, 2000-20
                                                                                                                                                        • Figure 50: Pound to euro exchange rate used (annual average), 2004-13
                                                                                                                                                      • Consumer tables
                                                                                                                                                        • Topline tables
                                                                                                                                                          • Figure 51: Retailers shopped in by consumers on a regular basis (once a month or more), NI and RoI, May 2010
                                                                                                                                                          • Figure 52: Agreement with statements relating to grocery shopping, NI and RoI, May 2010
                                                                                                                                                        • Demographic tables – retailers used regularly by consumers
                                                                                                                                                          • NI
                                                                                                                                                            • Figure 53: Retailers shopped in by consumers on a regular basis (once a month or more), by demographics, NI, May 2010
                                                                                                                                                            • Figure 54: Retailers shopped in by consumers on a regular basis (once a month or more), by demographics, NI, May 2010
                                                                                                                                                          • RoI
                                                                                                                                                            • Figure 55: Retailers shopped in by consumers on a regular basis (once a month or more), by demographics, RoI, May 2010
                                                                                                                                                            • Figure 56: Retailers shopped in by consumers on a regular basis (once a month or more), by demographics, RoI, May 2010
                                                                                                                                                          • Demographic tables – statements relating to grocery shopping
                                                                                                                                                            • NI
                                                                                                                                                              • Figure 57: Agreement with statements relating to grocery shopping, by demographics, NI, May 2010
                                                                                                                                                              • Figure 58: Agreement with statements relating to grocery shopping, by demographics, NI, May 2010
                                                                                                                                                              • Figure 59: Agreement with statements relating to grocery shopping, by demographics, NI, May 2010
                                                                                                                                                            • RoI
                                                                                                                                                              • Figure 60: Agreement with statements relating to grocery shopping, by demographics, RoI, May 2010
                                                                                                                                                              • Figure 61: Agreement with statements relating to grocery shopping, by demographics, RoI, May 2010
                                                                                                                                                              • Figure 62: Agreement with statements relating to grocery shopping, by demographics, RoI, May 2010
                                                                                                                                                            • TGI eating habits
                                                                                                                                                              • Figure 63: Agreement with statements relating to eating, NI, 2007-09
                                                                                                                                                              • Figure 64: Agreement with statements relating to eating, RoI, 2007-09
                                                                                                                                                            • TGI shopping statements
                                                                                                                                                              • Figure 65: Agreement with shopping statements, NI, 2004-09
                                                                                                                                                              • Figure 66: Agreement with shopping statements, RoI, 2004-09
                                                                                                                                                            • Consumer target groups
                                                                                                                                                              • NI
                                                                                                                                                                • Figure 67: Consumer target group, by demographics, NI, May 2010
                                                                                                                                                                • Figure 68: Food retailer used on a regular basis (once a month), by consumer target group, NI, May 2010
                                                                                                                                                                • Figure 69: Agreement relating to grocery shopping, by consumer typology, NI, May 2010
                                                                                                                                                              • RoI
                                                                                                                                                                • Figure 70: Consumer target groups, by demographics, RoI, May 2010
                                                                                                                                                                • Figure 71: Food retailer used on a regular basis (once a month), by consumer typology, RoI, May 2010
                                                                                                                                                                • Figure 72: Agreement relating to grocery shopping, by consumer target groups, RoI, May 2010

                                                                                                                                                            Companies Covered

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                                                                                                                                                            Discount Retailing - Ireland - September 2010

                                                                                                                                                            £1,095.00 (Excl.Tax)