The National Consumer Agency has confirmed major reductions in Irish grocery prices over the past six months in its latest price survey.
The biggest price reductions have been at Tesco supermarkets which have implemented its "Change for Good" pricing. However, the most expensive stores are the Tesco ones where the programme has not been rolled out.
On branded goods, the survey shows Dunnes and Tesco have similar prices for a basket of 68 branded products. Supervalu is also competing well in the border regions.
On own brand products, Aldi and Lidl are now so close to each other on price and the title of cheapest can go to either depending on what goods are in the basket.
Tesco is significantly narrowing the gap with Aldi and Lidl on own brand items, but Dunnes does not appear to be responding as aggressively in that area.
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
“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 Agency’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, there was a difference of €0.41 (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 have 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 22 common items, Lidl (€22.89) was the cheapest with Dunnes Stores (€31.52) being the most expensive. This is a variation between cheapest and dearest of €8.63 (38%) 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.
The full report
