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Grocery Retailing – Multiples vs Discounters - Ireland - December 2015
Overview 
 
What you need to know
Despite the convenience offered by online, Irish consumers show a preference for doing their grocery shopping in-store. Tesco is the supermarket of choice for NI and RoI consumers when doing their main grocery shopping, however, Irish consumers are more likely to visit supermarkets, and Lidl in particular, for top-up shopping. 

This indicates that the ‘big weekly shop’ is declining in Ireland and consumers are moving to buying groceries on an ‘as needs’ basis which could explain the popularity of the perishable categories at Lidl, such as fresh fruit and vegetables and bread. Indeed, Irish consumers have noticed the improvements in the quality of these products, reflecting the significant investment by discounter brands in these categories. 

Lidl’s continued investment in the storage and distribution of its fresh produce will see the quality of these goods improve further. Other retailers will need to look at how they can improve the quality of their fresh goods to remain competitive in these key categories and attract consumers into their stores. Price is an issue that has also dominated the grocery retailing sector in Ireland to such an extent that there are few points of differentiation among the main retailers. This is due to supermarkets such as Dunnes Stores and Tesco engaging in a price war to compete with the discounters Aldi and Lidl to attract consumers. 

Moving away from price-based competition and developing their stores into destination locations could provide traditional supermarkets with an enhanced value service that plays to their strengths and offers greater appeal to Irish consumers.

Issues covered in this report
This report will examine the grocery retailing sector in Ireland through exploring the issues that are driving or inhibiting its growth on the island. Covered in this report is the sale of all grocery items, focusing on food sold via mainstream supermarkets, such as Tesco, Asda and Dunnes Stores. The sale of groceries through convenience format stores, such as Spar, and the hard discounters, Aldi and Lidl, is also discussed. Each store type is defined as follows:

●	Hypermarket/superstore – The hypermarket concept was developed by Carrefour in France. The label was coined by the press for a store which had a sales area of 2,500m2. In the UK, including NI, the term superstore is typically used rather than hypermarket.
●	Supermarket – A supermarket sells a wide variety of goods, both food and non-food items. A supermarket can range in size anywhere between 400m2 and 2,500m2.
●	Convenience store – A convenience store (also called a c-store or symbol group retailer) tends to be smaller in size, is traditionally open for longer hours and typically sells staple groceries and snacks, although it also stocks a range of non-food items. Many petrol stations also supplement their operations with the offer of convenience stores. Prices are typically higher than those in a larger supermarket.
●	Discounters – Discounters (sometimes referred to as hard discounters) are retailers that subscribe to the ‘stack it high, sell it cheap’ mentality. Lidl and Aldi are the two leading examples in Ireland of these ‘no-frills’ retailers, which target price-conscious consumers.

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