12% rise in cost of groceries over two years

Updated: Monday, 11 Feb 2013 19:07

The cost of a typical basket of groceries has increased by more than 12% in the past two years.

The increase was identified in a survey by the Consumers' Association of Ireland, which also found that some products had increased in price by almost 40%.

The CAI carried out its survey in January and found price rises across a range of branded products since it last priced the same items in May 2011.

It said a sample of 19 branded goods showed prices have risen for 16 of them by between 5.5% and 38%.

The association also said the survey highlighted the extent to which the main supermarkets are engaging in price matching.

It said many of the items were identically priced across Dunnes Stores, Superquinn, SuperValu and Tesco.

CAI Chief Executive Dermott Jewell said the illusion is maintained that "competitors" in this sector are competing furiously.

He said: "Household budgets cannot, in any way, benefit from pricing patterns that are totally devoid of competition on products that are household staples."

The survey showed that the average price of a pack of Lyons Gold Label tea bags (80 bags) is 54 cent higher than in 2011, a pack of 225g Denny Gold Medal sausages is up 30 cent, while Siúcra granulated sugar is up 38% from €1.05 in 2011 to €1.45 now.

Only one of the items surveyed costs on average less than it did in 2011. One litre of Avonmore full-fat fresh milk is now €1.14, down from €1.16.

Speaking on RTÉ's Morning Ireland, Mr Jewell blamed rising food prices on the lack of competition in the supermarket sector.

He described price matching as phenomenal, adding: "There's just no stomach for competition at all in this sector.

"It has to be pointed out that these are products that the vast majority of the population would be buying all day, every day. It's tea, it's sugar, it's beans, it's milk, it's bread."

He said the trend of rising grocery prices was visible around the world because the cost of food is rising.

The survey did not include Aldi and Lidl, because they did not operate in the Irish market when it began over a decade ago.

Mr Jewell also said he would like to see one of what he called the "famous four" supermarkets - Dunnes, Superquinn, Tesco and Supervalu - to "break ranks" with the competition and lower their prices, which would then trigger the others to bring their prices down as well.

Retail Ireland, the IBEC group that represents the retail sector, today said food inflation remains very low in Ireland and the price of food and non-alcoholic beverages has fallen since 2008, according to official CSO statistics.

Retail Ireland Director Stephen Lynam said: "There's very modest inflation in the Irish economy. Official figures from the CSO's Consumer Price Index (CPI)... shows food and non-alcoholic beverage prices have fallen by 6.3% since 2008."

Spending power stabilisation

Meanwhile, consumer spending power is set to stabilise this year and improve in 2014, according to the latest edition of IBEC's Consumer Monitor.

Mortgaged working households would see the greatest gain in spending power, while unemployed households and those on fixed incomes would fare less well.

The employers' group added that last week's promissory notes deal is better than expected and should provide real momentum in consumer confidence.