Friday 22 September 2017

Price hikes force many households to cut back on food bills

Sarah McCabe

Sarah McCabe

HARD-pressed families are being forced to cut back on food spending as prices soar.

Shopping bills should be rising as grocery costs rocketed, but consumers are so short of cash that spending is actually decreasing.

New statistics show that families spend an average €67 less a year on food, even though grocery prices have increased by as much as ten times the normal rate of inflation.

Shoppers with children are coming under particularly intense pressure, according to market research group Kantor Worldpanel, which compiled the survey.

Retail Ireland, the retail arm of business body IBEC, said the new figures should be a warning sign for Finance Minister Michael Noonan.

"Consumers cannot tolerate any more tax increases. They are under too much pressure already," said Retail Ireland director Stephen Lynam, who represents more than 3,000 retailers.

"It's no surprise that consumers are finding ways to save even as products become more expensive," said Mr Lynam.

"In the same 12-month period, child benefit has been cut and the Government has introduced a new property tax. People are under more pressure than ever."

The findings, taken from a survey of 3,000 homes, comes just weeks after the Irish Independent revealed that grocery prices were rising far quicker than general inflation reported by the Central Statistics Office.

A separate June study by the Kantor Worldpanel examining 30,000 different everyday items showed that grocery inflation rose by 5pc between May 2012 and May 2013. This was almost 10 times the national inflation rate of 0.5pc.

The price of vegetables increased a massive 16pc, while meat, fish and poultry costs jumped 6.2pc.

Alcohol prices rose by 9.9pc following the €1 increase in the levy imposed on wine in last year's Budget and crisps and snacks jumped 5.8pc.

Those figures did not account for June hikes to the cost of milk, up by 10c per litre, pushing grocery costs even higher.

Rather than allow their bills to creep up, consumers are still trying to cut costs by shopping around and including discount supermarkets in their weekly shop.

VALUE

"People are not necessarily consuming less – but they are far more driven by value now. The days of shopping in one store are over" said Mr Lynam.

This pattern is clear in the findings on supermarket preferences. Value chains Lidl, Aldi and SuperValu were the only stores to grow their market share in the three months ending at the start of July.

Aldi and Lidl now have 7pc each of the market – that's a 27pc jump in Aldi's share in just three months.

All of the biggest multiples were down and Tesco lost market share at the fastest rate.

The British retail giant still has 27.6pc of the market, while Dunnes has 21.5pc (down 3.3pc) and Superquinn has 5.4pc (down 0.8pc).

"None of this comes as a surprise to retailers" said Kantor Worldpanel director Mark Thomson.

Irish Independent

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