Growing price competition in the grocery sector has virtually eliminated the price difference between the main multiples and has greatly reduced the gap between the multiples and discount stores, according to the latest price survey from the National Consumer Agency (NCA).
Shoppers can save up to 33.9 per cent by purchasing a basket of 34 own-brand goods in discounters such as Lidl or Aldi rather than the main multiples, the survey finds.
This represents a significant closing of the gap by multiples such as Tesco, Dunnes Stores 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 bought in Tesco, Dunnes and Superquinn. Last December, the gap stood at just over 1 per cent.
Ann Fitzgerald, chief executive of the NCA, said the most compelling finding from the survey was that competition was concentrating on 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.”
The latest NCA survey was carried out at the end of August, and follows two earlier surveys in December 2007 and last June.
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 both branded and own brand goods have risen in all retailers since December, the rate of increase is slowing and in many cases prices dropped over the summer.
The sharpest drop was observed in the case of Tesco’s own-brand goods, which were almost 5 per cent cheaper in August than they were in June. This is explained by the launch of the company’s “Cash Savers” line of low-cost goods, designed to compete with the offerings of Lidl and Aldi.
Ms Fitzgerald said that while the multiples had increased the number of special offers and promotions in recent months, 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 advised.
