CONSUMERS CAN cut their grocery bills by up to one-third by shopping in Lidl and Aldi, but the gap between these discount stores and the multiples is narrowing, according to the latest price survey from the National Consumer Agency (NCA).
Growing price competition in the grocery sector has virtually eliminated price differences on staple goods between the multiples - Tesco, Dunnes Stores and Superquinn - the survey also reveals.
Savings of up to 33.9 per cent can be achieved by purchasing a basket of 34 own-brand goods in Lidl or Aldi rather than in the multiples, it finds. This represents a significant closing of the gap by Tesco, Dunnes and Superquinn since last December, when the gap was over 59 per cent on a smaller basket.
The price gap between the multiples is also narrowing. Just 0.3 per cent separated the cheapest and the dearest price for a basket of 72 branded goods in Tesco, Dunnes and Superquinn. Last December, the gap stood at just over 1 per cent.
Ann Fitzgerald, chief executive of the NCA, says the most compelling finding from the survey is the increasing competition in the own-brand sector, with the difference in price narrowing between the multiple and the discounters.
"We believe that this is the result of the multiples now directly competing with Aldi and Lidl on own-brand goods due to increased publicity around lower prices offered by the discounters, influencing price-conscious consumers to split their baskets and seek out best value."
Superquinn has criticised the surveys because they do not take account of product quality or whether items are sourced in Ireland. Ms Fitzgerald says it is up to consumers to make their own judgments about quality, convenience and price.
The latest survey was carried out at the end of August and follows two surveys in December 2007 and last June. However, the June survey was not published because Tesco subsequently reduced prices across its grocery range.
Just 73 cent separated the cheapest store, Dunnes, from the dearest, Superquinn, on a basket of 72 items costing over €240. Supervalu was only marginally dearer than the three main supermarket chains.
The survey again shows that shopping in convenience stores comes at a cost, with Spar emerging 22 per cent dearer than Dunnes on a basket of 34 items; Centra was only 6 per cent dearer.
Among the discounters, Lidl was 3 per cent cheaper than Aldi.
Ms Fitzgerald said the further narrowing of the price gap on branded goods in the main multiples reinforced the agency's view that consumers needed more competition in this sector of the retail grocery market.
The survey also shows that prices of branded and own-brand goods have risen in all retailers since December, but the rate of increase is slowing and in many cases, prices dropped over the summer.
The sharpest drop was in Tesco's own-brand goods, which were almost 5 per cent cheaper in August than in June. This is explained by the launch of its "cash savers" line of low-cost goods, designed to compete with Lidl and Aldi.
This has slashed the margin between Tesco and Lidl on own-brand goods from 52 per cent last December to 17 per cent in the current survey.
Ms Fitzgerald says while the multiples had increased the number of special offers and promotions, this had not been matched by a long-term drop in the prices of staple branded goods.
"We would urge consumers to exercise caution when taking advantage of special offers as they can often be for discretionary goods, rather than the staples that make up the weekly shop."
Shoppers should not be unduly swayed by special offers and promotions, she advises.
