Grocery prices are now climbing at their fastest rate in more than two years, with the rate of inflation in Irish supermarkets put at almost 7 per cent when compared with this time last year, according to fresh data from Worldpanel by Numerator.

The retail analysts said grocery inflation rose to 6.8 per cent in the 12 weeks to the end of last month, compared with a rate of 6.25 per cent recorded a month earlier.

It means inflation is coming close to the 7.1 per cent that Worldpanel reported in January 2024.

While the 6.8 per cent rate of grocery inflation is considerably lower than rates of close to 17 per cent that were recorded at the height of the cost-of-living crisis in the summer of 2023, the latest increases are on top of the earlier hikes and the cumulative impact will see many households worse off by in excess of €3,000 over the course of a year.

The data also suggests that take-home grocery sales in Ireland rose by 5 per cent in the four weeks to January 25th, with shoppers spending more than €1.2 billion on groceries over the period.

While shoppers made slightly more trips to stores compared with the corresponding period last year, they purchased 1.9 per cent fewer packs this year

“January is typically the time when shoppers reset their household budgets, and this year was no different,” said Worldpanel’s Emer Healy. “While grocery sales continued to grow, rising inflation meant that value remained front of mind for consumers.”

Healy said a pressure-group study carried out by Worldpanel suggested that more shoppers in Ireland are finding the economic climate tough, with 31 per cent saying they are struggling to make ends meet.

“This is no surprise, rising grocery inflation means that consumers are increasingly feeling the pinch” Healy said.

After grocery spending hit a record high in December, shoppers have looked to rein in costs in January, a trend that would typically boost the share of own-label products.

Grocery spending and the volume sold on promotion over the latest 12-week period remained at a record low of just 19.6 per cent, suggesting that shoppers are managing their budgets through everyday choices rather than increased promotional purchasing.

Own-label products accounted for 43.4 per cent of total grocery spend, up 0.7 percentage points on the previous month, with shoppers spending more than €1.7 billion on own-label goods over the latest 12-week period.

The strong performance of premium own-label good also continued, with growth standing at 5 per cent, while branded products remained resilient, growing 7.3 per cent and ahead of the total market, which grew at 5.2 per cent.

In January, Irish shoppers spent an additional €454,000 on low- and no-alcohol beverages, amid greater participation in dry January. Spending on fresh fruit, chilled smoothies, juices and yoghurts was also on the rise, increasing by more than €8.1 million. Healthcare sales increased 6.8 per cent year on year, with consumers ploughing an additional €1.8 million into the category as they stocked up in time for the start of flu season.

“As shoppers refocus on health after the indulgence of the festive period and the onset of flu season, we’re seeing growing demand for everyday staples that support their wellbeing goals, such as products rich in protein and fibre,” Healy said. “The wettest January in eight years also drove demand for ‘comfort food’ options to be enjoyed at home.”

“Rather than following short-term, diet-driven trends, consumers are opting for a more balanced, sustainable approach to healthy eating built around familiar, accessible foods that fit naturally into their daily routines. With more shoppers exploring plant-based choices through Veganuary, meat alternative products experienced an uplift during the period, with shoppers spending an additional €838,000 on meat substitutes versus last year.”

Among the retailers, Dunnes holds 24.8 per cent market share, up on the previous 12-week period and with sales growth of 4.5 per cent year on year.

Tesco holds just under a quarter of the market, at 24.4 per cent, with value growth of 6.5 per cent year on year while SuperValu holds 19.4 per cent market share, with growth of 0.4 per cent.

Lidl was once again the fastest-growing grocer, up 12.2 per cent and holding 13.2 per cent of the market. Aldi holds 10.4 per cent market share, up 1.7 per cent, driven by an influx of new shoppers who drove an additional €13.8 million in sales.