In his Development & Insights update for December 2025, Bank of Ireland’s head of Retail Sector Owen Clifford notes the Irish retail sector is entering 2026 with a mix of resilience and ambition.
In his December 2025 update, Owen Clifford noted that despite persistent concerns over food inflation, industry data suggests that grocery price increases since the pandemic remain below the European average by approximately five per cent.
According to the Competition and Consumer Protection Commission’s August report, there is no evidence of excessive pricing or inflated profit margins across the sector.
“Balancing value for customers while delivering margin that sustains their business in a competitive market remains a key focus”
Bank of Ireland figures indicate that family-owned retailers such as SuperValu, Centra, Eurospar and Londis have maintained consistent margins while continuing to invest in local communities.
Cost of living realities
Retailers acknowledge that rising food prices are a real concern for households.
“Balancing value for customers while delivering margin that sustains their business in a competitive market remains a key focus,” Clifford said after meeting more than 150 retailers nationwide in recent months.
Investment remains a defining feature of the market. Tesco has rolled out new Express-format stores in Dublin, while Aldi, Lidl and other leading brands continue to expand their footprint. Partnerships are also reshaping the landscape, with collaborations such as Applegreen and Taco Bell, Corrib Oil and Wendy’s, and Dunnes and Iceland introducing new propositions to Irish consumers.
The broader retail environment has shown stability, with sales volumes between January and September 2025 broadly in line with the previous year. Investor confidence in retail parks and shopping centres has strengthened, reflected in transactions in Dublin, Cork, Kilkenny and Meath.
Occupancy levels have returned to above 95% nationwide, supported by the arrival of international names including Arket, New Balance, Pret A Manger and Kiko.
Retailers are increasingly focused on building communities through both physical and digital channels. Experiential retail is gaining traction, with loyalty schemes, in-store events and local sponsorships fostering engagement.
“Offering services or products that add to our lifestyle and sense of community, rather than just selling a commodity, is becoming essential,” Clifford recommends.
Physical stores remain central to retail strategy, serving as hubs for brand engagement and customer experience. Operators are investing in design and staff training to create welcoming environments and support hybrid models that integrate online and offline channels.
Clifford notes that limited-edition ranges and exclusive events are being used to tap into consumer behaviour driven by fear of missing out.
AI in the aisles
Artificial intelligence is emerging as a transformative force. Progressive retailers are already deploying AI for stock management and supply chain optimisation, with plans to extend its use to personalised customer experiences.
Looking ahead, the sector is expected to sustain investment in personnel development, digital transformation and store networks.
Grocery and convenience, home and furniture, beauty and sports and wellness are among the sub-sectors best positioned to thrive. With approximately 300,000 jobs supported nationwide, retail remains a cornerstone of the Irish economy.
“It’s encouraging to see progressive operators continuing to invest in their people, premises and systems while delivering robust financial performance,” Clifford added. “A proactive approach is imperative to navigate the challenges ahead.”
As Irish businesses navigate a trading environment impacted by global geopolitical uncertainty, the opportunities associated with artificial intelligence (AI) and fluctuating consumer sentiment, the Bank of Ireland Sectors team examine the developments, challenges and opportunities across seven key elements of the Irish economy; Agriculture, Healthcare, Hospitality, Manufacturing, Food & Drink, Retail and Technology-media-telecoms (TMT).
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Top image: Photo by Kevin Dowling on Unsplash
