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Supermarket Retailing - Ireland - September 2011

The supermarket retailing market has faced its share of challenges since the recession hit in 2008, with consumer spending patterns shifting, production prices increasing and a more competitive environment. However, the downturn has also provided supermarket retailers with a number of opportunities for growth.

Lower spending power has seen rising demand for own-brand goods, which are perceived as providing good value for money, while the trend for consumers to entertain guests at home (as opposed to going out) has helped to boost sales of premium food and drink in supermarkets.

Key questions from the report include:

  • Who are the key supermarket and food retailing brands in Ireland? – What shops do Irish consumers visit the most, and what shops do they only visit every so often? What factors other than price do Irish consumers consider when food shopping?
  • Are Irish consumers embracing online grocery shopping? – With more consumers using the internet and shopping online, why is grocery shopping online still struggling to take hold? What can supermarket retailers do to encourage growth?
  • Are Irish shoppers increasingly more price-savvy? – Consumers have seen their spending power diminish in the recession. How has this changed the way they shop? Are consumers planning their shopping trips more?
  • What will the impact of inflated food prices be? – The costs of raw ingredients and other production costs (ie energy) have seen a large increase between 2008 and 2011. What effect will this have on sales of food? Do discount brands stand to benefit? Will this strain the relationship between food retailers and suppliers?
  • What type of threat do convenience stores and discounters pose to supermarkets? – Convenience stores account for a large segment of the Irish food retailing market. What type of threat do they pose to supermarkets?

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Table of contents

  1. Introduction

      • Key themes
        • Definitions
          • Consumer research
            • Abbreviations
            • Insights and Opportunities

              • Easing fears about online grocery shopping
                • Entertaining at home helps to boost sales
                  • Kids staying at home for longer
                  • Market in Brief

                    • Irish consumers more likely to plan their shopping
                      • Groceries market grows
                        • Tesco most regularly shopped at supermarket
                        • Fast Forwards

                            • Trend 1: The Big Issue
                              • What’s it about?
                                • What we’ve seen
                                  • What next?
                                    • Trend 2: Men Shopping Badly
                                      • What’s it about?
                                        • What we’ve seen
                                          • What next?
                                          • Internal Market Environment

                                            • Key points
                                              • A higher degree of planning
                                                • Figure 1: Agreement with the statement ‘I decide what I want before I do the weekly shopping’, RoI and NI, 2006-11
                                                • Figure 2: Agreement with the statement ‘When doing the household shopping I budget for every penny’, RoI and NI, 2006-11
                                              • Recession frugality is unlikely to disappear
                                                • Figure 3: Agreement with the statement ‘When the recession ends, I will buy more branded products’, RoI and NI, 2010
                                              • Women still main grocery shoppers in NI and RoI
                                                • Figure 4: Gender and marital status of main shoppers, RoI and NI, 2011
                                              • RoI men more likely to grocery shop than NI men
                                                • Figure 5: Agreement with the statement ‘I really enjoy cooking’, by gender, RoI and NI, 2009 and 2011
                                              • High street and town centre supermarkets attract more shoppers
                                                • Figure 6: Type of shop consumers are most likely to go to for their grocery shopping, RoI and NI, 2009-11
                                              • Distance travelled an important consideration
                                                • Figure 7: Distance consumers travel for grocery shopping, RoI and NI, 2011
                                              • Fuel price concerns make location all the more important
                                                • Figure 8: Type of transport used for grocery shopping, RoI and NI, 2011
                                                • Figure 9: UK and RoI fuel prices (petrol and diesel), 2001-11
                                              • Rental rates may push supermarkets out of town
                                                • Figure 10: € per annum rental per metre squared, for Belfast and Dublin, 2011
                                              • Supermarket expansion faces resistance
                                                • The importance of local sourcing
                                                  • Online channel beginning to gain momentum
                                                    • Figure 11: Internet used in the last 12 months, RoI and NI, 2005-11
                                                    • Figure 12: Daily internet usage, NI and RoI, August 2011
                                                  • Free delivery is key to growing the online groceries channel
                                                    • Figure 13: Factors that encourage consumers to try/do more online food shopping, NI and RoI, June 2011
                                                  • Obesity rears its ugly head
                                                    • Comfort eating contributing to weight problem
                                                        • Figure 14: Agreement with the statement ‘I should do more about my health’, RoI and NI, 2006-11
                                                    • Broader Market Environment

                                                      • Key points
                                                        • Consumer expenditure drops in RoI, and stalls in NI
                                                          • Figure 15: Economic outlook, RoI and NI, 2009-11
                                                        • Economy still troubled...
                                                          • ...but groceries are seen as a necessary spend
                                                            • Figure 16: Areas consumers have cut back on spending in the last 12 months, NI and RoI, July 2010
                                                          • Consumer sentiment wanes
                                                            • Figure 17: Consumer Sentiment/Confidence Index, UK and RoI, September 2008-11
                                                            • Figure 18: Issues concerning consumers, RoI and NI, 2011
                                                          • Increase in global food prices will limit consumer spending power
                                                            • Figure 19: Global price of wheat per tonne (€), September 2008-11
                                                            • Figure 20: Global price of barley per metric ton (€), September 2010-September 2011
                                                          • Prices increase, but wages don’t
                                                            • Figure 21: Median gross weekly pay, NI and RoI, 2006-11
                                                          • Unemployment set to worsen
                                                            • Figure 22: Unemployment rates, RoI and NI, July 2009-June 2011
                                                          • Ageing of population puts emphasis on quality
                                                            • Figure 23: Agreement with the statement ‘I only shop at supermarkets that sell good-quality fresh food’, by age, RoI and NI, 2011
                                                        • Strengths and Weaknesses

                                                          • Strengths
                                                            • Weaknesses
                                                            • Who’s Innovating?

                                                              • Key points
                                                                • Bakery category sees highest NPD
                                                                  • Figure 24: New food and drink product launches to UK and Irish market, by top ten categories, 2007-11
                                                                • Brand new products most popular type of launch
                                                                  • Figure 25: New food and drink product launches to UK and Irish market, by top five launch types, 2007-11
                                                                • Health claims dominate new product launches
                                                                  • Figure 26: New food and drink product launches to UK and Irish market, by top ten product claims, 2007-11
                                                                • Light and diet product development
                                                                  • Tesco the most prolific company in terms of product launches
                                                                    • Figure 27: New food and drink product launches to UK and Irish market, by top ten companies, 2007-11
                                                                • Market Value and Forecast

                                                                  • Key points
                                                                    • All-Ireland food retailing sales contract to €14.6 billion in 2011
                                                                      • Figure 28: All grocery sales, all-Ireland, 2005-15
                                                                    • NI grocery sales value increases, but due to inflation and higher production costs
                                                                      • NI food retailing market accounting for bigger percentage of total
                                                                        • Figure 29: All grocery sales, by percentage share, NI and RoI, 2008 and 2011
                                                                      • Supermarket retailers account for highest percentage share of the food retailing market
                                                                        • Figure 30: All grocery sales, by segment, all-Ireland, 2011
                                                                      • Supermarket retailers more dominant in NI
                                                                        • Figure 31: Estimated supermarket retailers’ segment market value, all-Ireland, RoI and NI, 2005-15
                                                                      • Austerity measures and drive for value will slow future growth for RoI
                                                                      • Competitive Context

                                                                        • Key points
                                                                          • Recession has put a dampener on convenience store market
                                                                            • Figure 32: Estimated convenience store segment market value, all-Ireland, RoI and NI, 2005-11
                                                                          • Loss of lunchtime trade takes a bite out of the market
                                                                            • Figure 33: Agreement with statements relating to lunch meals, NI and RoI, August 2011
                                                                          • Convenience aspect still a draw for shoppers
                                                                            • Discounters segment experiences rapid uplift in NI
                                                                              • Figure 34: Estimated discounters’ segment market value, all-Ireland, RoI and NI, 2005-11
                                                                            • Irish consumers display positive attitude towards discounters
                                                                              • Figure 35: Agreement with statements relating to grocery shopping, NI and RoI, May 2010
                                                                          • Companies and Products

                                                                              • Figure 36: Retailers profiled, 2010
                                                                            • Asda
                                                                              • Co-op
                                                                                • Dunnes Stores
                                                                                  • Iceland
                                                                                    • Marks & Spencer
                                                                                      • Sainsbury’s
                                                                                        • Superquinn
                                                                                          • SuperValu
                                                                                            • Tesco
                                                                                            • The Consumer – Where do Irish Consumers Shop?

                                                                                              • Key points
                                                                                                • Tesco is the store of choice for both NI and RoI consumers
                                                                                                    • Figure 37: Retailers consumers have shopped most often at in the last month vs. other retailers shopped at in the last month, NI and RoI, August 2011
                                                                                                  • Dunnes more popular among RoI consumers
                                                                                                    • Figure 38: Consumers who have shopped in Dunnes stores in the last month, NI and RoI, August 2011
                                                                                                  • Cash-strapped RoI consumers more inclined to visit discounters
                                                                                                      • Figure 39: Consumers who have shopped in Lidl and Aldi in the last month, NI and RoI, August 2011
                                                                                                    • Discounters expanding to meet growing consumer need
                                                                                                      • Half of RoI consumers shopped in SuperValu in the last month
                                                                                                          • Figure 40: Consumers who have shopped in SuperValu in the last month, NI and RoI, August 2011
                                                                                                        • M&S premium standing keeps visitations down
                                                                                                            • Figure 41: Consumers who have shopped in M&S in the last month, NI and RoI, August 2011
                                                                                                          • Trend for treats helping to drive monthly visits to M&S
                                                                                                            • Superquinn visited by 18% of RoI consumers
                                                                                                                • Figure 42: Consumers who value friendly and helpful staff, by age, NI and RoI, August 2011
                                                                                                              • Convenience retailers – NI consumers prefer Spar, RoI consumers prefer Centra
                                                                                                                  • Figure 43: Consumers who visit Spar or Centra at least once a month, NI and RoI, August 2011
                                                                                                              • The Consumer – Attitudes Towards Grocery Shopping

                                                                                                                • Key points
                                                                                                                  • Mainstream supermarkets are preferred retailers of Irish consumers
                                                                                                                      • Figure 44: Agreement with statements relating to grocery shopping habits, NI and RoI, August 2011
                                                                                                                    • Supermarkets seen as ideal grocery retailer
                                                                                                                        • Figure 45: Agreement with the statement ‘I prefer to shop at the main supermarkets’, by location and social class, NI and RoI, August 2011
                                                                                                                      • Getting all of the shopping out of the way at once
                                                                                                                        • Full-time workers don’t have time for several shopping trips
                                                                                                                          • Figure 46: Agreement with the statement ‘I do one big grocery shop a week’, by working status, NI and RoI, August 2011
                                                                                                                        • Planning shopping trips helps to cut down on time spent in supermarkets
                                                                                                                          • Mature consumers shopping at discounters more
                                                                                                                              • Figure 47: Agreement with the statement ‘I do a lot of my shopping with discounters’, by age, NI and RoI, August 2011
                                                                                                                            • RoI consumers more likely to be brand switchers
                                                                                                                                • Figure 48: Agreement with the statement ‘I go to whichever shop has the best special offers in a given week’, by gender, NI and RoI, August 2011
                                                                                                                              • Spreading the cost
                                                                                                                                  • Figure 49: Agreement with the statement ‘I spread my weekly shopping across a number of shops to get the best value’, by gender and age, NI and RoI, August 2011
                                                                                                                                • Smaller markets and convenience stores not seen as having good value…
                                                                                                                                  • …but are still key areas for top-up shopping
                                                                                                                                      • Figure 50: Agreement with the statement ‘I only shop in smaller supermarkets/ convenience stores to top up my shopping during the week’, NI and RoI, August 2011
                                                                                                                                  • The Consumer – Important Factors when Grocery Shopping

                                                                                                                                    • Key points
                                                                                                                                      • Value for money is the most important factor when grocery shopping
                                                                                                                                        • Figure 51: Most important factors when grocery shopping, NI and RoI, August 2011
                                                                                                                                      • Women and mature consumers more likely to consider value for money
                                                                                                                                          • Figure 52: Consumers who consider value for money important when grocery shopping, by gender and age, NI and RoI, August 2011
                                                                                                                                        • Consumers with families and those nearing retirement find value for money more vital
                                                                                                                                          • Low prices appeal most to the less affluent
                                                                                                                                              • Figure 53: Consumers who consider value for money important when grocery shopping, by gender and age, NI and RoI, August 2011
                                                                                                                                            • Special offers will draw consumers into retailers
                                                                                                                                              • Car parking seen as very important
                                                                                                                                                • Shoppers don’t like to travel too far
                                                                                                                                                  • Consumers prefer supermarkets well stocked with well-known brands
                                                                                                                                                      • Figure 54: Importance of well-known brands, own-brands and Irish brands, NI and RoI, August 2011
                                                                                                                                                    • Own-brand products seen as less important, but consumer attitudes towards them are improving
                                                                                                                                                        • Figure 55: Agreement with the statement ‘On the whole I think well-known brands are better than a shop’s own-brand’, RoI and NI, 2007-11
                                                                                                                                                    • Consumer Target Groups

                                                                                                                                                      • NI target groups
                                                                                                                                                        • Figure 56: Consumer typologies, NI, August 2011
                                                                                                                                                      • Mainstream Shoppers
                                                                                                                                                        • Pricers
                                                                                                                                                          • Valuers
                                                                                                                                                            • Uncaring
                                                                                                                                                              • RoI target groups
                                                                                                                                                                • Figure 57: Consumer typologies, RoI, August 2011
                                                                                                                                                              • Big Shoppers
                                                                                                                                                                • Spreaders
                                                                                                                                                                  • Offer Seekers
                                                                                                                                                                    • Not Bothered
                                                                                                                                                                    • Appendix

                                                                                                                                                                        • Figure 58: Population, by age, RoI, 2006-41
                                                                                                                                                                        • Figure 59: Population, by age, NI, 2008-58
                                                                                                                                                                      • NI consumer tables
                                                                                                                                                                        • Retailers shopped at the most in the last month
                                                                                                                                                                          • Figure 60: Retailers consumers have bought the most groceries from in the last month, by demographics, NI, August 2011
                                                                                                                                                                          • Figure 61: Retailers consumers have bought the most groceries from in the last month (continued), by demographics, NI, August 2011
                                                                                                                                                                          • Figure 62: Retailers consumers have bought the most groceries from in the last month (continued), by demographics, NI, August 2011
                                                                                                                                                                        • Other retailers shopped at in the last month
                                                                                                                                                                          • Figure 63: Other retailers consumers have bought the most groceries from in the last month, by demographics, NI, August 2011
                                                                                                                                                                          • Figure 64: Other retailers consumers have bought the most groceries from in the last month (continued), by demographics, NI, August 2011
                                                                                                                                                                          • Figure 65: Other retailers consumers have bought the most groceries from in the last month (continued), by demographics, NI, August 2011
                                                                                                                                                                        • Agreement with statements related to grocery shopping
                                                                                                                                                                          • Figure 66: Agreement with statements relating to grocery shopping, by demographics, NI, August 2011
                                                                                                                                                                          • Figure 67: Agreement with statements relating to grocery shopping, by demographics, NI, August 2011
                                                                                                                                                                        • Important factors when grocery shopping
                                                                                                                                                                          • Figure 68: Important factors when grocery shopping, by demographics, NI, August 2011
                                                                                                                                                                          • Figure 69: Important factors when grocery shopping (continued), by demographics, NI, August 2011
                                                                                                                                                                          • Figure 70: Important factors when grocery shopping (continued), by demographics, NI, August 2011
                                                                                                                                                                        • Consumer typology tables
                                                                                                                                                                          • Figure 71: Agreement with statements relating to grocery shopping, by consumer typologies, NI, August 2011
                                                                                                                                                                          • Figure 72: Important factors when grocery shopping (continued), by consumer typologies, NI, August 2011
                                                                                                                                                                          • Figure 73: Consumer typologies, by demographics, NI, August 2011
                                                                                                                                                                        • RoI consumer tables
                                                                                                                                                                          • Retailers shopped at the most in the last month
                                                                                                                                                                            • Figure 74: Retailers consumers have bought the most groceries from in the last month, by demographics, RoI, August 2011
                                                                                                                                                                            • Figure 75: Retailers consumers have bought the most groceries from in the last month (continued), by demographics, RoI, August 2011
                                                                                                                                                                            • Figure 76: Retailers consumers have bought the most groceries from in the last month (continued), by demographics, RoI, August 2011
                                                                                                                                                                            • Figure 77: Other retailers consumers have bought the most groceries from in the last month, by demographics, RoI, August 2011
                                                                                                                                                                            • Figure 78: Other retailers consumers have bought the most groceries from in the last month (continued), by demographics, RoI, August 2011
                                                                                                                                                                            • Figure 79: Other retailers consumers have bought the most groceries from in the last month (continued), by demographics, RoI, August 2011
                                                                                                                                                                          • Agreement with statements related to grocery shopping
                                                                                                                                                                            • Figure 80: Agreement with statements relating to grocery shopping, by demographics, RoI, August 2011
                                                                                                                                                                            • Figure 81: Agreement with statements relating to grocery shopping, by demographics, RoI, August 2011
                                                                                                                                                                          • Important factors when grocery shopping
                                                                                                                                                                            • Figure 82: Important factors when grocery shopping, by demographics, RoI, August 2011
                                                                                                                                                                            • Figure 83: Important factors when grocery shopping (continued), by demographics, RoI, August 2011
                                                                                                                                                                            • Figure 84: Important factors when grocery shopping (continued), by demographics, RoI, August 2011
                                                                                                                                                                          • Consumer typology tables
                                                                                                                                                                            • Figure 85: Agreement with statements relating to grocery shopping, by consumer typologies, RoI, August 2011
                                                                                                                                                                            • Figure 86: Important factors when grocery shopping (continued), by consumer typologies, RoI, August 2011
                                                                                                                                                                            • Figure 87: Consumer typologies, by demographics, RoI, August 2011

                                                                                                                                                                        Companies Covered

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                                                                                                                                                                        Supermarket Retailing - Ireland - September 2011

                                                                                                                                                                        £1,095.00 (Excl.Tax)