Monday 29 May 2017

Shopping basket costs on the rise again as price wars fizzle out

Aideen Sheehan Consumer Correspondent

GROCERY prices are on the rise again, with little difference on offers between top supermarkets.

A survey by the National Consumer Agency (NCA) has shown identical prices for many items -- indicating retailers were more focused on matching their competitors on price rather than beating them.

Tesco and Dunnes were neck-and-neck on price with a difference of just 4 cent on a basket of goods costing €262.37 at Tesco and €262.41 at Dunnes.

The same basket of 92 popular items such as Brennans bread, Kerrygold butter and Denny sausages cost €3.44 more at Superquinn, ringing in at €265.81, while at SuperValu it was nearly €9 or 3pc dearer at €271.26.

Prices for branded items have risen by more than 5pc at all stores over the past year, the NCA research found, with prices now close to 2007 levels, having risen sharply in 2008, and then fallen between 2009 and 2010.

However, market data from Kantar shows that despite the price hikes, consumers are spending just 1pc more than they did a year ago.

This indicates that consumers are responding to the squeeze by buying less, snapping up special offers, or switching to cheaper own-brand products.

This is a welcome dynamic, given that during the boom people were only interested in convenience, the NCA said.

NCA chief executive Ann Fitzgerald said it was striking that more than one-third of the products surveyed had identical prices across all supermarkets surveyed -- some 37pc of items cost the same everywhere compared to 24pc a year ago.

"Rather than seeing the emergence of a real champion of better value, we observe that grocery retailers in the Irish market remain tightly focused on matching, but not beating the prices of their competitors," she said.

There were some differences, however. For example, a packet of Denny rashers cost €2.29 at Tesco, Dunnes and Superquinn, compared with €2.99 at SuperValu.

The gap between SuperValu prices and those of the cheapest supermarkets also widened in the past year, and SuperValu prices checked at different stores were almost identical to each other.

Competition

Ireland needs another overseas supermarket chain with deep pockets to enter the market in order to boost competition and drive prices down, Ms Fitzgerald said.

She said she looked forward to the outcome of a report into the retail planning guidelines, carried out for Enterprise Minister Richard Bruton on foot of an International Monetary Fund demand to look at the case for superstores.

"If the decision is we want to preserve unique aspects of the Irish retail landscape, then we have to accept that prices will remain higher than they could be, but we have to make that choice and live with it," she said.

Discount supermarkets Lidl and Aldi were not included in the survey because they do not stock most of the branded items surveyed.

Irish Independent

Promoted articles

Editor's Choice

Also in Irish News