Irish fed up with excesses produced by Celtic tiger

According to an analysis about the local effects of recession by the Irish Nielsen subsidiary, Irish consumers have quickly turned their back on the excesses produced by the Celtic tiger which represents economic boom. As a director of the National Bank, Ronnie O’Toole has pointed out: recession has hit the Irish economy extremely hard, with a 1.5 percent drop in GDP, following growth of 6 percent seen in 2007. While the value of the consumer confidence index was among the highest ones on our continent in 2006 (118 out of 200), it has dropped to 63 by March 2009. Ireland used to be one of the most frequently admired positive examples of economic performance in the EU until recession struck in 2008, leading to the biggest decline in food retail among the 21 markets monitored by Nielsen. The Irish food retail system is quite fragmented with a total of 9,200 stores. Out of these, 2,790 units belong to purchasing partnerships, 1,960 stores are independent, while the number of “garage stores” is 1,835. There are also more than 1,000 units operating in post offices. There are six modern chains: Dunnes Stores, Tesco, Aldi, Lidl, Marks&Spencers and Superquinn. Many people have cut their spending, turning to cheaper stores and products. Sales of Aldi and Lidl are now growing faster than the expansion of their chains. However, demand for premium category products has not dropped as substantially as expected. According to Jonathan Banks from the local Nielsen subsidiary, Ireland has not seen a recession like this before. Sales of discounts have grown in all categories, with a basket of 10-15 products costing 40 percent less than in other modern retail chains. Sales of private labels are soaring with the exception of a few categories like sweets or spirits. Both consumers and retailers have become increasingly conscious of the price/value ratio. Price competition is pushing margins down. However, health and beauty categories have been successful in resisting the challenge posed by private labels so far.