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Irish Consumers Continue Move to Private Label

25 October 2012

BordBia

At the moment the Irish grocery market is being underpinned by renewed food price inflation, according to Peter Duggan from the Strategic Information Services at Bord Bia - Irish Food Board.

As a result more Irish consumers are recording higher consumption of private label products.

The Irish grocery market is valued at approximately €8.9 billion. Within this, the discounters have a market share equivalent to 11.4 per cent of the total retail sector.

However, Kantar forecast that over the next five years, their market share will grow significantly to over 15 per cent.

The profile of consumers attracted to the discounters tends to be families under fifty who have a mortgage with a net monthly household income below €3,000.

Food price inflation is currently running at just over two per cent, which is impacting on household spending. Kantar report that consumers are turning to private label products to maintain, or in some cases, reduce their weekly grocery spend.

This is expected to lead to further growth of the private label market, rising from the current 46 per cent to 50 per cent by 2016.

At the moment, most of the private label growth is being driven by the discounters and Super Valu (reflecting the strong emphasis that they have placed on the “Irishness” theme on their private label offering).

Expansion in the private label range on offer and improved consumer perceptions regarding product quality have all helped to drive sales.

Recent Kantar analysis shows that 64 per cent of all consumers believe that private label products are of good quality.

This growth presents challenges for branded manufacturers as they too need to on emphasising value for money through promotions, building loyalty through rewards, and engaging with consumers to convince them of the brand benefits associated with their products.

October 2012

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