Business World

Sunday 4 December 2016

Retailers 'not cutting prices in line with fall of sterling'

Published 14/10/2016 | 02:30

Shops and utility companies were accused of not passing on the benefits of the collapse in
the value of sterling to consumers. REUTERS
Shops and utility companies were accused of not passing on the benefits of the collapse in the value of sterling to consumers. REUTERS

Retailers have been accused of boosting their profits at the expense of consumers.

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The charge was made after new figures showed prices of goods and services have not fallen over the past year despite the collapse in the value of sterling.

Shops and utility companies were accused of not passing on the benefits of the collapse in the value of sterling to consumers. Figures from the Central Statistics Office show prices were unchanged in September.

This is despite the fact the value of sterling has crashed by 24pc in the past year as investors sell sterling on international currency market over fears of a hard Brexit.

A large proportion of consumer goods in this country are imported from Britain.

Deputy chairman of the Consumers' Association Michael Kilcoyne said prices should be falling sharply. "We import a huge amount from the UK, which means prices should be falling in supermarkets and other shops. Instead, they are using this to increase profits and not passing on the benefits of weaker sterling to consumers."

The CSO said overall prices fell by just 0.4pc in September, but were unchanged when compared with the same month last year. Statisticians found there were increases in September in the price of fish, coffee and tea, cigarettes, third-level education, rents, pharmaceutical products, GP fees, hotels, and hospital services.

But the rate of increase in motor insurance premiums shows signs of easing.

Motor insurance premiums were up 0.3pc in September, and rose by 25.1pc in the year.

Director of Retail Ireland Thomas Burke said the sterling devaluation has presented retailers with a new challenge.

"Given that most retailers have hedged their currency purchases out towards the end of the year, they are yet to see any real benefit from the shift in sterling which has largely only taken hold in recent weeks."

Irish Independent

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