Ireland’s grocery sector is entering a year of transition as rising costs, demographic shifts and accelerating technology reshape the market, notes Bank of Ireland’s head of Retail Sector Owen Clifford in his Outlook for 2026.
Ireland’s grocery and convenience sector enters 2026 with a mix of confidence and caution. Strong take‑home grocery sales, sustained investment from major retailers and robust consumer demand have kept the market buoyant. Yet deep structural pressures are reshaping how retailers invest, hire and compete.
Speaking about the year ahead, Owen Clifford says the industry is standing at what he calls a “quiet but important turning point.”
“Customers are judging own brand on taste, sustainability and value with much higher expectations. Retailers are responding because it is now central to loyalty, not a peripheral part of the shop”
Clifford notes: “Retailers feel the strength of current demand but also recognise that the operating environment is getting tougher in ways that require long term thinking rather than quick fixes.”
Government scrutiny and pricing pressure
A renewed public focus on food prices defined 2025, culminating in a Competition and Consumer Protection Commission review commissioned by the Department of Enterprise, Trade and Employment.
While the review found no evidence of excessive profit taking or lack of competition, Clifford says the process “encouraged every retailer in the market to take a fresh look at pricing strategy and communication with customers.”
Inflation remained elevated at around 6% towards the end of 2025 and consumers responded by leaning more heavily on own‑brand ranges. Retailers have moved quickly to improve quality, expand choice and prioritise visibility in store.
Clifford notes that the shift has accelerated faster than many expected.
“Customers are judging own brand on taste, sustainability and value with much higher expectations. Retailers are responding because it is now central to loyalty, not a peripheral part of the shop.”
Store investment continues despite cost pressures
New store openings and extensive revamps were a feature of 2025 across all regions, reflecting the strong financial health of major brands. Dunnes and Tesco continued to vie for market leadership, each benefiting from strategic expansion and sharper execution.
Still, underlying costs have risen. Minimum wage increases, auto‑enrolment for pensions and higher insurance premiums have put pressure on margins.
Clifford says the industry is adjusting with discipline. “Retailers know they cannot carry inefficiency into a higher‑cost era. Every investment in a store revamp or supply chain improvement is being stress tested against its long term return.”
Consolidation also continued across the market, with independent operators buying additional stores and forecourt groups reshaping their networks. International brands such as Wendy’s and Taco Bell began formal expansion into Ireland through partnerships with Corrib Oil and Applegreen respectively.
A tightening talent pipeline
One of the most significant challenges ahead is the labour market. The sector has historically provided a clear pathway for entrepreneurial employees to progress into store ownership.
Rising store valuations and consolidation have made that path harder to access.
Clifford says the issue is more than a staffing concern. “We are starting to see a generational shift. To attract the next wave of talent, retailers are investing in structured development plans and more flexible career paths. Automation will help, but human capability remains the heart of the model.”
Demographic change and the rise of the senior shopper
Ireland’s population over 65 has doubled in the past twenty years and is expected to rise sharply again by mid‑century.
Clifford says retailers are preparing for this transformation with greater urgency. “This is one of the most significant consumer shifts of the next decade. Retailers will need to think about store design, product range and the small service details that matter to older shoppers.”
Across Europe, consumers of all ages remain focused on saving money on food. The strengthened own‑brand trend reinforces this, but premium, healthy and sustainable options still matter. Balancing affordability with rising expectations will remain a priority.
Sustainability moves from aspiration to operational plan
Retailers are now developing full decarbonisation strategies, covering energy‑efficient equipment, recycling, plastic reduction and food waste. Irish households dispose of an estimated €1.2 billion in salvageable food each year and the Environmental Protection Agency is working with retailers to reduce that volume.
Clifford says sustainability is becoming operational rather than conceptual. “This is no longer a values conversation. It is a cost conversation, a supply chain conversation and a customer expectation. Retailers who ignore it will experience a financial penalty as well as a reputational one.”
Digital transformation gathers pace
Ireland’s grocery sector has been slower than some European peers to adopt advanced digital systems across supply chain, stock management and analytics. That is beginning to change. Investment in electronic shelf labels, smart rostering, automation and AI‑enabled forecasting is expected to accelerate through 2026.
Clifford describes the shift as overdue but decisive. “Technology will not replace the fundamentals of retail, but it will make those fundamentals work better.
“AI is already improving stock accuracy and forecasting. The next step is to personalise the experience for customers in a way that feels natural rather than intrusive.”
A sector entering a new phase
Despite the challenges, retailers are entering 2026 with confidence and continued appetite for investment. Freehold valuations remain strong and leasehold transactions are increasing as new entrants seek more accessible routes into ownership.
Clifford is optimistic about the sector’s ability to adapt.
“We are seeing a mature market behave with discipline. There is a realism about cost, a focus on long term planning and a willingness to embrace change. That combination puts the sector on solid ground for the year ahead.”
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