An investigation by the Competition and Consumer Protection Commission (CCPC) into the grocery retailer sector has found there is no evidence showing any issues regarding competition among retailers in terms of food prices.
Market Analysis:
In updating its 2023 work, the CCPC applied standard market analysis tools to produce a high-level analysis of the grocery retail sector. This allows it to identify indications of potential market failures.
The analysis included reviews of:
- market concentration and entry/expansion
- national and international trends in grocery prices
- profit margins of major grocery retailers
The CCPC found that, while food prices have increased significantly in recent years in Ireland. They have generally remained below the European average.
It says that increases in the prices of some agricultural products have been key to recent rises in food prices. The CCPC’s study finds, however, that grocery prices have increased at a slower pace than agricultural prices since 2021. “This suggests that competition in the grocery market has helped limit the impact of increased agricultural prices on Irish consumers,” the CCPC says.
The dynamics in the grocery retail sector and how companies compete with one another is an important indicator for a market analysis. A healthy market is more likely to see companies appeal to consumers through aggressively offering better prices and services. It is also more likely to see companies compete by operating slightly different business models to gain a competitive advantage. The dynamics identified in 2023 are said to be still relevant. They continue to show aggressive price competition, new loyalty card schemes and different product offerings.
Operating profits:
Recent profit figures from grocery retailers “continue to be in line with the margin band estimated by the CCPC in 2023”. Which was between 1% and 4%.
Tesco Ireland’s operating profit margin for the year to Feb 2024 was 3.7% (down from 4% in the previous year), Musgrave’s (which owns SuperValu and Centra) profit margin in 2023 was 2.4%, down from 2.5% the previous year. Aldi’s profit margin in 2023 was 0.8%, down from 0.9% in 2022. Dunnes and Lidl do not publish accounts for their Irish operations. Lidl’s UK accounts (which combine UK and Irish activities) for 2023/2024 show a profit margin of 2.1%.
It says the profit margins for Irish supermarkets “align closely with those observed in the UK and other parts of Europe”. From 2021 to June 2025, Irish consumers experienced a 27% increase in grocery prices. This is compared with the EU average rise of 35%.
NB – This is a guide for information purposes only and does not constitute legal advice. If you have an issue requiring legal advice, please contact any of the team at Nolan Farrell & Goff LLP. Contact numbers can be found on our website www.nfg.ie, or email info@nfg.ie.
