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SUPERMARKET SWITCH: FAMILIES TO SAVE UP TO €1,195 A YEAR BY SWAPPING TO SUPERMARKET OWN-LABEL PRODUCTS

Irish households could save almost €100 a month, or €1,195 a year, by swapping from branded products to supermarket own label, new data from ALDI reveals

• 1 in 4 households say they are struggling to make ends meet due to rising grocery costs
• Most shoppers say they are cutting back but struggling shoppers are absorbing more inflation
• Data shows that nearly eight in 10 shoppers could mitigate inflation by switching to own-label products in the stores they already visit

Shoppers can make significant savings by swapping from more expensive branded groceries to supermarket’s lower cost own-label products, according to new data from ALDI Ireland.

An average Irish household could save almost €100 a month, or €1,195 a year, by swapping from branded grocery products to supermarket own label, helping to lessen the sting of grocery inflation which is at its highest level in more than a decade.

ALDI’s Shopping Basket Economics was carried out as part of a review and analysis of the impact that the Covid-19 pandemic and current economic climate was having on consumer trends and purchasing behaviours.

The findings come at a time when more than half a million Irish homes (502,000) or one in four households (28%) say that they are struggling to make ends meet in the face of rising grocery costs. A further 47% say that they are only managing ‘ok’, while those that consider themselves ‘comfortable’ has dropped by 30% since March to now just 23%.

Bargain baskets

Kantar recently warned that the impact of grocery inflation means that the average annual shop could rise by a staggering €662 if people don’t make changes in their shopping baskets and trollies. Grocery price inflation in Ireland hit a record 11% in September, although ALDI is trending below that mark at 8%.

ALDI’s own data shows that the average basket-spend-per-trip in 2022 was €28.40. This is up from €23.90 in 2019 and represents a year-on-year percentage value growth of +4.9%.

The retailer also notes that people are shopping more but buying less, which is an indicator of consumers being more proactive in managing their finances. Non-essential goods such as spirits, wines and ciders are all seeing reduced volume of purchases, while sales of fresh meats such as lamb are also down. ALDI has also seen more consumers choosing to purchase own-label brands rather than eliminating the product entirely from their shop.

When asked where they intended to cut back, 47% of shoppers said eating out in restaurants, 46% said takeaways, and 38% said they would cut back on pub nights out.

Interestingly, two categories ALDI reports seeing strongest growth both during the pandemic and now are premium coffee and chilled desserts, which suggests that people are swapping activities outside the home with affordable indulgence in the home.

Andrew Barling, Insights Manager at ALDI Ireland said: “Across the board, we’ve seen shoppers adjusting their behaviours in response to the cost-of-living crisis. We have found that shoppers are reducing their overall weekly spend, the number of shopping trips they make, and the number of products purchased per visit.

“Most notably, however, we’re seeing a clear shift by consumers to private-label products. Since 2001, brands have lost over 10% market share to private label and now compete in a 50/50 grocery market. The current market split is 51/49 in favour of private label, indicating that consumers are actively seeking out value. Significantly, our research shows that nearly eight in 10 shoppers could mitigate inflation by swapping to own-label products in the stores they already visit with savings of almost €100 a month, or €1,195 a year, to be made.”

“The discount retailer points to farm inputs and output prices as having a major impact on costs, alongside the continuing fallout from Covid and the war in Ukraine.”

Comment from Niall O’Connor, Group Managing Director at ALDI Ireland:

“The Irish grocery market is experiencing unprecedented cost pressures at present, and it is undoubtedly a difficult trading environment for all. We are not immune to this, but we are doing all we can to shield our customers and keep prices low. We remain as committed as ever to delivering value and this means that we will continue to invest in our business, in expanding our store network to reach more people, in creating important local jobs, and in supporting those most vulnerable in our communities through our charity partners.”

“We are absorbing price increases on a range of products at a significant cost to the business, while we are selling many products at cost as a result of increased supplier prices. There have been increases on a number of core products like milk, butter and bread which is driven by increased commodity prices including oil, energy and grain costs.”

“While we are at the mercy of increasing costs, we are fighting hard and are continuing to deliver on our price promise. Our guarantee to our loyal and valued customers is that we will always offer unbeatable value, and this will not change.”

“We were at the frontline supporting the Irish consumer during the pandemic, and we are ready, willing and able to deliver the best value in the grocery market now once again during these unprecedented inflationary times.”

Last year, ALDI spent €1 billion with its Irish food and drink suppliers. In September, it announced two new deals with Irish-based suppliers Broderick’s Handmade Cakery and Cookie Dó worth a total of €8.5m. ALDI also recently announced a significant €63m investment in the West of Ireland opening six new stores and creating 140 full-time jobs.