The National Consumer Agency (NCA) today published its biannual grocery survey which showed a widening price gap between the three multiples and a decline in the number of branded goods sold at identical prices. The survey also demonstrated that the gap between Aldi and Lidl has narrowed since the August 2008 survey. When comparing a basket of branded goods between Dunnes Stores, Superquinn and Tesco, the difference between the cheapest and dearest basket was €3.60 (1.2%).

Ann Fitzgerald, Chief Executive of the National Consumer Agency said, “For the first time we’re seeing the gap in the branded market widen while own brand prices are narrowing. Our survey suggests that the response of the multiples to the challenge from discount chains such as Aldi/Lidl has resulted in strong focus on "own brand" as a product category for all retailers, while a more aggressive approach on branded goods means we are seeing less price matching”.

“This sharper focus on price competition reflects what consumer market research is telling us about how shopping habits have changed, with price now being the principal consideration in choice of main grocery shop, versus convenience a year ago.”

She went on to say, “Despite the positive trend towards price competition between grocery retailers, it is important to highlight that over the period of our surveys, the aggregate cost of a basket of goods has increased. Retailers are changing their marketing techniques. In the past year we’ve seen an increase in the range of special offers by the multiples, but we would prefer to see sustained price cuts and we would urge caution amongst consumers, as special offers may not always deliver the best value.”

Branded Goods

When comparing a basket of branded goods between Dunnes Stores, Superquinn and Tesco, the difference between the cheapest and dearest basket was €3.60 (1.2%). The cost of this basket was virtually identical in Dunnes Stores (€292.48) and Superquinn (€292.49). The cost of the basket in Tesco was €296.08.

A total of 37 out of 83 goods (45%) had identical prices across all three stores. The percentage of identically priced goods is declining. In the August 2008 Survey the percentage was 56% and in June 2008 it was 71%.

“The gap of 1.2% is the biggest variation we have seen between the multiples since we began carrying out the surveys in 2007 and suggests some repositioning in the market,” said Fitzgerald. “We’re also seeing a drop in the number of branded goods with identical pricing. We believe that this is evidence of growing competition amongst the multiples, as they begin to compete not just with the discount retailers but aggressively between themselves.”

Examining the period from December 2007 to January 2009, aggregate prices in separate baskets for Tesco, Dunnes and Superquinn all recorded an increase. Tesco recorded the largest increase (4.9%), Superquinn (2.8%) the smallest increase. Dunnes recorded an increase of 3.5%.

When Supervalu are included, a basket of 64 goods was cheapest in Dunnes Stores (€189.03) and dearest in Supervalu Dublin South (€194.24). The difference between cheapest and dearest is €5.21 (2.8%). Again the gap between cheapest and dearest is widening compared to August 2008 when returns showed a variation of 1.6% across a basket of 64 items.

Own Brand Goods

On own brand goods, the gap between Dunnes and Tesco and the discounters, Aldi and Lidl has narrowed significantly. On a basket of 28 common items, Lidl (€34.80) are the cheapest with Dunnes Stores (€42.20) being the most expensive. This is a variation between cheapest and dearest of €7.40 (21.26%) down from 35.9% on a basket of 34 items in August 2008.

The gap between Dunnes and Tesco has decreased between August and January. On a basket of 36 own brand items Tesco at (€53.65) was the cheaper with Dunnes Stores at €55.07. This represents a variation of €1.42 (2.6%) down from a variance of 6.2% in the August 2008 survey.

On a basket of 49 items common between Aldi (€69.37) and Lidl (€70.34) , there was a difference of 1.4% or 97 cents. This was compared to a difference of €2.27 or 3.2% on a basket of 50 items in August 2008.

Over the period December 2007 to January 2009 separate baskets for Aldi, Lidl, Dunnes and Tesco all became more expensive. Tesco’s basket recorded the largest increase at 9.3%, Dunnes the smallest increase at 4.1%. Aldi recorded an increase of 4.2% and Lidl an increase of 4.7%.