NCA publishes latest grocery survey and consumer behaviour research
- Significant reductions in grocery prices over past 6 months
- Increased competition on branded goods
- Dunnes Stores and Tesco ('Change For Good' stores) neck and neck on branded goods
- Aldi and Lidl gap closes
- Tesco ('Change For Good' stores) and Dunnes Stores gap widens on own brand
- 34% of Irish grocery shoppers buying less
22 July 2009
The National Consumer Agency (NCA) today published its biannual grocery survey, which showed major reductions in grocery prices since its last survey six months ago.
A significant finding was that Dunnes Stores and Tesco (Change for Good) prices on branded goods are very close. The survey also showed that the price gap between Aldi and Lidl has narrowed significantly since January 2009, with very little difference between them.
Ann Fitzgerald, Chief Executive of the NCA, said: "Prices are coming down across the board which is good news for consumers.
"However, the survey is also throwing up some very interesting findings, with Dunnes Stores and Tesco pricing almost neck and neck on branded goods, indicating that Dunnes is meeting Tesco prices as it rolls out its 'Change for Good' campaign. SuperValu stores along the border region, where it is running its Sterling Match programme, are not far behind."
Branded goods
Please note that two Tesco stores were included in the comparisons due to their current dual pricing model, in Non Change for Good (CfG) stores and in stores already converted to the Change for Good (CfG) initiative.
Approximately half of Tesco stores have not yet switched over to the new pricing policy, therefore consumers in a large proportion of the country cannot currently avail of the lower prices.
However, due to Tesco's stated policy of adopting their new pricing model throughout the country by the end of August the commentary in this section is mainly confined to comparing Tesco (CfG) with Dunnes Stores and Superquinn. Full data for Tesco's other higher pricing model (Tesco Non CfG) is clearly noted in the main report and in footnotes in this release and this data is included on all charts.
"The 4% spread between the cheapest and dearest basket in the multiples is the biggest we have seen to date and is an indication of the competitive pricing that these retailers are now offering to consumers willing to shop around," said Ann Fitzgerald.
"Interestingly, Tesco stores where it is not running its 'Change for Good' programme are now the most expensive. Dunnes Stores appears to be competing with Tesco 'Change for Good' stores, as is SuperValu in the border regions.
"Superquinn appears to be competing selectively but fares less well in the aggregate comparisons."
Comparing survey results from January 2009 and June 2009, prices in separate baskets of branded goods for Tesco, Dunnes Stores, Supervalu and Superquinn all recorded a decrease.
Tesco recorded the largest decrease (comparing prices in January 2009 with prices in its stores included in the "Change for Good" pricing model), Superquinn the smallest.
When comparing a basket of 68 branded goods between Dunnes Stores, Superquinn and Tesco (CfG), the difference between the cheapest and dearest basket was €8.54 (4%), up from 1.2% in January 2009.
This variation is greater than the difference seen in any of the NCA's previous surveys. The cost of this basket was practically identical in Dunnes Stores (€214.99) and Tesco CFG* (€215.11). The cost of a basket in Superquinn was €223.53.
When SuperValu** are included, a basket of 58 goods was cheapest in Tesco CFG (€188.98) and dearest in Tesco (Non CFG) (€199.78).
Excluding Tesco (Non CFG), the difference between the cheapest (Tesco CGF) and the dearest (Superquinn) store is €8.33 (4.4%). Again, the gap between the cheapest and dearest is widening compared to the January 2009 survey when the difference was 2.8% (€5.21).
Own brand goods
Ann Fitzgerald said: "When looking at the own-brand market it's a very different story. The gap between Aldi and Lidl has narrowed.
"Our survey suggests that pricing between them is now so close that the title of cheapest can swing either way depending on the selection of goods in a basket. We're also seeing Tesco significantly narrow the gap with Aldi and Lidl on own brand items."
The survey shows, on a basket of 52 items, that there was a difference of €0.38 (0.6%), with Aldi cheapest at €67.78. This was compared to a difference of €0.97 or 1.4% on a basket of 49 goods in the January 2009 survey, when Lidl was cheapest.
She went on to say, "By contrast, Dunnes Stores does not appear to be responding as aggressively in the own brand segment and has fallen behind the competition, coming in 14% dearer than Tesco 'Change for Good'."
On a basket of 41 own brand items, Tesco (CFG) (€56.81) was the cheapest, Dunnes Stores (€64.75) was the dearest. This represents a variation of €7.94 (14%).
This difference has increased significantly since the previous survey in January 2009 when the variance was 2.6% on a basket of 36 own brand items.
When comparing Aldi, Lidl, Dunnes Stores and Tesco, the margins between them have significantly increased since the January 2009 survey.
On a basket of 21 common items, Lidl (€20.40) was the cheapest with Dunnes Stores (€28.30) being the most expensive. This is a variation between cheapest and dearest of €7.90 (39%), up from 21.3% on a basket of 28 items in the January 2009 survey.
Over the period January 2009 to June 2009, separate baskets for Aldi, Lidl, Dunnes Stores and Tesco all became cheaper.
The basket of goods from Tesco (comparing prices in January 2009 with prices in its stores included in the "Change for Good" pricing model) recorded the largest decrease, with Dunnes Stores recording the smallest decrease.
Amarach Consumer Behaviour Research
The research shows:
- Consistent with the November/December 2008 research, one in two shoppers have changed the way in which they do their grocery shop since the start of the year
- The greatest change in shopping habit from the previous wave of research is the amount of grocery shoppers who are buying less since the start of the year (34% which is an increase of 14% since last wave in 2008)
Commenting on the latest wave of research carried out by the NCA on consumer behaviour, Ann Fitzgerald said: "Our most recent research carried out by Amarach*** shows that three in four consumers now consistently shop around for better prices.
"As observed for the first time in our survey during January this year, price remains the key influencing driver for consumers in choosing where they do their main grocery shop, followed by convenience.
Almost one in four of those who have changed their shopping habits are also spending less. This is down to the fact that they are shopping where it is cheaper and they are buying less."
Detailed findings and full data are available on NCA.ie
Notes
* The basket was €229.77 in Tesco Dublin (Clarehall) and with this included in the mix above the difference between cheapest and dearest was €14.78 (6.9%)
** It should be noted that SuperValu and Centra are operating a "Sterling Match" pricing initiative in 27 SuperValu and 44 Centra stores located along the border.
*** The National Consumer Agency has published Wave three of findings from a Consumer Market Research Survey compiled by Amarach Consulting. The report presents data relating to "Consumer Empowerment" drawn from independent research carried out amongst Irish consumers and marks the third of a rolling series of such reports the Agency will publish.
Downloads
Download the National Consumer Agency Price Comparison Survey July 2009:
The following survey data is also available to download: