Bank of Ireland head of Retail Sector Owen Clifford’s latest report highlights store expansion, digital transformation and changing consumer habits across Ireland’s grocery and convenience market.
Ireland’s grocery and convenience sector remains in expansion mode, with retailers investing heavily in new stores, refurbishments, technology and sustainability initiatives as they navigate inflationary pressures and evolving consumer expectations.
That is according to Bank of Ireland’s Retail Convenience Sector H1 2026 Insights and H2 2026 Outlook report, which points to strong activity across the market despite ongoing challenges around costs, recruitment and supply chain pressures.
“A significant level of new store openings/extensive store revamps have continued in 2026 across all regions supporting job creation and the wider Irish business eco-system”
The report notes that significant levels of new store openings and extensive refurbishment programmes have continued across the country throughout 2026, supporting employment and investment within local communities.
Positive outlook for Irish retail market
Owen Clifford, Head of Retail Sector at Bank of Ireland, said the level of activity reflects the confidence major operators continue to have in the Irish market.
“A significant level of new store openings/extensive store revamps have continued in 2026 across all regions supporting job creation and the wider Irish business eco-system. This reflects both the competitive nature, robust financial health and positive outlook of the leading brands in respect of the Irish market.”
The report highlights a number of major developments across the sector, including Tesco’s continued rollout of Express-format stores, Centra’s €27 million investment programme and Lidl Ireland’s plans to invest €600 million over the next five years in new stores and distribution infrastructure.
Food inflation remains one of the defining issues for consumers. Irish grocery inflation stood at approximately 4% in June and July 2026, while retailers continue to deal with higher commodity costs, rising labour expenses, insurance costs and broader global trade uncertainty.
Clifford said maintaining value for shoppers remains a priority across the industry.
“Consumers evaluate every purchase more critically, comparing alternatives and questioning premiums. The ability to prove a fair exchange between price and quality becomes decisive. Retailers need to clearly communicate their ‘value’ bona-fides both in-store, online and in their marketing material. What is the current consumer view of their store/brand? Sometimes a market perception of being ‘too expensive’ can be based on the lay-out or the look & feel of the store, or even the tone of advertising material. This may not align with the reality of the proposition.”
Competition remains intense among the country’s largest operators. The report notes that Dunnes Stores and Tesco continue to compete closely for the leading position in grocery market share, supported by strong performances in key regions and continued investment in store networks.
Key trends
Retailers are also adapting to changing shopping behaviours. Smaller convenience-focused formats are benefiting from customers making more frequent top-up shopping trips, creating opportunities for operators to enhance their local neighbourhood offerings.
The growing popularity of own-brand products continues to shape the market, with retailers investing in broader ranges that include premium, healthy and sustainable options. According to the report, this trend is being supported by increased promotional activity and marketing campaigns designed to strengthen customer loyalty.
Staffing remains a key focus area for the industry. Retailers are responding through enhanced employee development programmes, management training opportunities and greater adoption of automation technologies to support operational efficiency.
Clifford said businesses are increasingly combining workforce development with technology investment. Technology is expected to play an increasingly important role across the sector during the second half of 2026 and beyond.
The report highlights growing adoption of electronic shelf labels, self-scan checkouts, smart rostering systems and artificial intelligence tools to enhance stock management, supply chain visibility and customer engagement.
“The use of electronic shelf labels, self-scan checkouts and smart rostering systems can be instrumental in driving a better work environment when balanced appropriately with maintaining the customer service values of the business – retailers will continue to invest in same to future-proof their business.
“Detailed analysis from retailers pre and post revamp will be an imperative to ensure that a maximum return on investment is delivered via sales mix improvement, margin growth and cost saving. Bank of Ireland data suggests that when delivered effectively – a store revamp can drive sales growth of 5%-10% and margin growth of c1%. In a competitive environment, creating a sense of theatre and leading with an innovative food to go proposition in-store can act as a catalyst to sustain customer engagement and business profitability.”
AI, in particular, is expected to help retailers create more personalised customer experiences through the use of shopping history and consumer preferences while improving forecasting and inventory management.
Sustainability is also rising up the agenda. Retailers are investing in energy-efficient equipment, food waste reduction initiatives and recycling programmes as they respond to regulatory requirements and consumer expectations. The report notes that Irish households collectively dispose of an estimated €1.2 billion worth of salvageable food each year, creating opportunities for retailers to support behavioural change while reducing environmental impacts.
Meanwhile, consolidation remains a feature of the sector, particularly within roadside retail and forecourt operations. The arrival and continued expansion of international foodservice brands including Wendy’s, Taco Bell and Popeyes through partnerships with Irish operators is expected to further shape the market during the remainder of 2026.
Looking ahead, Bank of Ireland expects investment activity to remain centred on store acquisitions, succession planning, refurbishment projects and operational technologies that help protect margins and improve customer experience. The Bank’s analysis suggests that a well-executed store revamp can generate sales growth of between 5% and 10%, alongside margin improvements of around 1%.
Clifford said retailers that continue to invest in their proposition, technology and customer experience will be well positioned for future growth.
Irish grocery and convenience retailers have consistently demonstrated their ability to adapt to changing market conditions.
He said businesses that continue investing in their stores, people, technology and customer offering will be best placed to create long-term value and sustainable profitability.
Read the full report:
Top image: Boxed Water Is Better on Unsplash
👉 No tech background needed to bring your business into the AI age! Secure your Google AI Professional Certificate to complete the certification at no cost. Apply now and get started!
-
Bank of Ireland is welcoming new customers every day – funding investments, working capital and expansions across multiple sectors. To learn more, click here
-
For support in challenging times, click here
-
Listen to the ThinkBusiness Podcast for business insights and inspiration. All episodes are here. You can also listen to the Podcast on:
-
Spotify
-
SoundCloud
-
Apple
