Irish grocery and convenience sector maintains strong momentum amid inflation and investment drive, says Owen Clifford head of Retail Sector at Bank of Ireland.
The Irish grocery and convenience sector continues to demonstrate resilience and growth in the face of inflationary pressures, supply chain challenges, and evolving consumer expectations, according to Bank of Ireland’s Grocery & Convenience Outlook H2 2025.
Retailers delivered robust performance in the first half of 2025, with Irish grocery inflation recorded at 5.4% in June and July.
“Rising food prices are understandably a very real concern for families nationwide”
A government-initiated review of pricing strategies, led by the Competition and Consumer Protection Commission (CCPC), concluded in August that there was no evidence of excessive profits or lack of competition in the market.
“Having met over 150 retailers across the country in recent months, I can confirm that balancing value for customers whilst delivering margin that sustains their business in a competitive market remains a key focus,” Owen Clifford, Head of Retail Sector at Bank of Ireland.
“Rising food prices are understandably a very real concern for families nationwide. However, as always, a nuanced and evidence-based approach is required when evaluating the root cause of same.”
Retailers are responding to consumer demand for value by expanding own-brand offerings, with premium ranges growing by approximately 15% year-on-year. Clifford noted that “own-brand is not all about price and value. The development of premium, proprietary in-house food solutions can provide a strong margin-generating differentiation point for retailers when delivered effectively.”
Priorities for 2026
The report highlights continued investment across the sector. Tesco Ireland plans 1,200 new store openings as part of a €40 million investment, while Applegreen is investing €750 million in its US operations. Corrib Oil is projecting 10 new jobs as it expands its network toward 100 stores by 2030. Musgrave’s retailers have installed 45,000 solar panels nationwide, supporting its carbon neutrality goal by 2040.
Digital transformation remains a priority, with retailers investing in automation and smart technologies to improve supply chain efficiency and reduce waste. The report also notes that 90% of retail emissions are Scope 3, linked to suppliers and consumers. Retailers are beginning to collaborate with suppliers to improve emissions data and set joint climate targets.
The sector is also addressing demographic shifts. With the number of people aged over 65 expected to reach 1.5 million by 2050, retailers are urged to tailor offerings to meet the needs of senior shoppers, who will represent a growing share of consumer spending.
Bank of Ireland reaffirmed its commitment to supporting the sector. “Our proven financial capabilities and appetite, combined with comprehensive sector expertise, provide us with a strong platform to meet the funding requirements of Irish retailers,” the report stated.
The outlook for H2 2025 remains positive, with continued focus on store investment, margin preservation, and sustainability. Retailers are expected to maintain high standards while adapting to economic and regulatory pressures, ensuring long-term viability and customer satisfaction.
Grocery Convenience Outlook H2 2025:
Main image at top: Photo by engin akyurt on Unsplash
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