The Irish grocery market declined by 3.9% during the 12 weeks to August 8, as life continued to edge back to normal and indoor dining in restaurants, pubs and cafés returned for people who are double vaccinated.
Kantar said it was important to put the dip in sales in perspective as they are compared to a time at the peak of Covid-19 restrictions last year.
Its latest figures show that Irish shoppers spent a massive €333.2m more on take-home groceries compared to the same 12 week period in 2019, which represents double-digit growth of 13.4% in two years.
It noted that some of the best-selling categories during the Covid-19 lockdowns are now seeing the biggest sales drops.
Sales of tea and coffee both fell by 8% as people have gradually got back to offices and can now take a break in coffee shops once again.
The impact of the reopening of hospitality has been balanced slightly by a boom in staycations this summer, Kantar also noted.
Instead of travelling overseas for holidays, many families packed up the car and headed to holiday rentals closer to home.
"While the overall market is in decline, shoppers spent €7.7m more on soft drinks, €664,000 more on savoury snacks and €579,000 extra on chilled burgers and grilling meats as they made the most of the summer holidays and the August Bank Holiday," commented Kantar's Emer Healy.
Today's figures also show that online grocery sales dropped by 0.7% during the past 12 weeks.
"Online shopping has been one of the most effective barometers of consumer confidence throughout the pandemic - when online orders decline, it shows that people are growing more comfortable to venture to physical shops and eat out again," Emer Healy said.
Shoppers spent €917,000 less online, while their basket sizes went down by 4.4% in the latest 12 week period.
"People are buying less but it's worth noting that the number of people making an online order has actually held steady at 14% compared with last year. It looks like customers who were converted to digital in lockdown have enjoyed the convenience and service they've received and are sticking with it longer term," she added.
Kantar's latest figures show that SuperValu once again had the largest share of the grocery market this period at 22.6%.
It noted that customers visiting 5.8% more often contributed an additional €37m to the grocer's sales. SuperValu shoppers made 21.1 trips on average in the latest 12 weeks which was the highest frequency amongst all retailers.
Meanwhile, Tesco, Dunnes, Aldi and Lidl all welcomed new shoppers in the last 12 weeks.
"During lockdown, shoppers returned to making big weekly shops and became increasingly loyal to one supermarket to feed their families.
"Now that everything is opening up again, they are happier to mix it up and pop into different shops and Tesco, Dunnes, Aldi and Lidl all saw new faces in store this period as a result," Emer Healy said.