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FEATURE
Through the roof
As retailers contend with the highest rate of inflation in 20 years, grocery prices reach levels that would have been unprecedented a year ago. Julia O’Reilly takes a closer look at what’s behind the phenomenon We are currently experiencing the highest annual levels of inflation in 20 years. Brexit, Covid-19, and supply chain issues have created the perfect storm. Retailers across the country are facing inflation shock as fuel and groceries surge in price. We had been warned. In November 2021, Irish families were told to brace themselves for significant grocery price hikes at the hands of pandemic-linked distribution issues. Over the last 12 months, the price of bread increased by 5.3%, poultry by 3.5% and pasta by 6.4%, the Central Statistics Office (CSO) has said. The price of our favourite pick-me-ups, coffee and tea, climbed 2.5% and 1.9% respectively. Oils and fats, such as butter, vegetable oils and olive oil, are now 4.4% more expensive than this time last year. With these increases, the average cost of a weekly shop is set to grow by €15. Under likefor-like grocery price inflation, which assumes shoppers buy the same products this year as they did last year, a typical consumer would spend €780 more on groceries. For shoppers in Northern Ireland, annual shopping bills are set to rise by £180 on average. Kantar said inflation in January stood at 3.8%, which was an increase on December levels.
— this is the fastest growth since October 2020. The number of products sold on promotion was 3% lower than the previous January. Meanwhile, those feeling the impact of rising inflation on their personal finances have been shopping around for the best bargains they can find. Emer Healy, senior retail analyst at Kantar, said: “We’re already seeing evidence of people starting to shop around at different retailers to try and find the best price for their weekly shop.”
Hidden costs Behind each inflated price is a complex web of factors that the public tend not to see. In November of last year, it was reported that the cost of foil trays for use in the ready meal market had seen a 10-15% increase and a box of vinyl gloves used by deli counter staff to handle food had witnessed a tenfold cost increase. Price increases are not about profit
Steady increase Prices had been steadily increasing over the course of the year, but the most dramatic inflation occurred in the last six months, in line with rising energy prices. In the 12-weeks to 26 December, Kantar put grocery market inflation at 1.2%. Overall food and nonalcoholic drinks are up 1.6% on an annual basis. Grocery price increases across 30,000 items have jumped by an annual rate of 1.7%
ShelfLife February 2022 | www.shelflife.ie
CSNA National Executive member Sara Orme recently appeared on Claire Byrne Live to discuss inflation and how it is impacting retailers and their customers
maximisation; for the retailers across the country that are absorbing price increases of this sort and more, driving prices up is the only option. Meanwhile, we are witnessing cost hikes for petrol and diesel not seen in 30 years. Recent figures from the CSO revealed that diesel and petrol are up 36% and 32% respectively. The cost of filling a car is now at its highest level since the AA first began to survey fuel prices in 1991. Pump prices are nearing the €2 per litre mark. Add to that the burden of surging energy costs - prices for electricity are up 22.4% while gas is up 28% - and it’s clear why many retailers are feeling the pressure.
Feeling the pinch Sarah Orme, CSNA National Executive member, and the owner of Daybreak, Westmeath, recently appeared on Claire Byrne Live to discuss the issue. Orme has been paying more for the maintenance of services, and that increase is reflected in the prices in her store: “Suppliers have increased costs because of transport or wages. We’re being given the same reasons. They are hidden costs to us. A lot of this is manufacturer price increases and we really have to pass them down the line to the consumer.” And consumers are certainly feeling the pinch - particularly when it comes to fuel. “A lot of people have been commenting that it would have been €70 or €80 to fill the car [in the past],” says Orme, “but it’s now over €100 for the same fill that probably only lasts them the week.” Within the shop itself, Orme says customers are well aware of the price changes, however small. “A lot of people would come in with the >>
