Irish supermarket price inflation eases back to 2.5% this summer, as spending lifts off to €2.49bn

Price inflation at Irish supermarkets has eased somewhat this summer but continues at a fair clip of 2.5% despite the rise in the euro against sterling, a leading survey of the big five grocers suggests.

Irish supermarket price inflation eases back to 2.5% this summer, as spending lifts off to €2.49bn

Price inflation at Irish supermarkets has eased somewhat this summer but continues at a fair clip of 2.5% despite the rise in the euro against sterling, a leading survey of the big five grocers suggests.

Market researcher Kantar said the annual inflation rate of the 30,000 grocery items it tracks was running at 2.5% in the 12 weeks through August 11.

That brings grocery price inflation back to April’s level and compares with a rate of over 3% recorded in early summer -- which was the highest level of price increases for five years.

Prices at supermarkets this year have started to rise again after a long period of meager or no inflation when retailers and wholesalers and suppliers tapped the large slump in the value of sterling when the UK voted in the summer of 2016 to leave the EU.

The slump in the UK currency made buying the many grocery items imported from across the Irish Sea so much cheaper.

Some economists have been looking out for price inflation to ease back again in the wake of the renewed bout of sterling weakness, as fears rose in recent weeks that Britain will crash out of the EU at Halloween.

The Kantar survey shows that the takings at the supermarket tills rose by 2.7% in the 12 weeks’ period from a year earlier, to top €2.49bn, as unseasonably cold weather boosted sales of wines, and supermarkets launched selective discounts.

Sales at the big five supermarkets — Dunnes, Tesco, SuperValu, Aldi, and Lidl — which account for almost 90% of all the takings at supermarket tills in the Republic — rose at the faster rate, of 3.4% from last summer.

With 21.6% of the €2.49bn spend, Dunnes secured the largest share just ahead of Tesco on 21.5% and SuperValu’s share of 21.3%.

A growth spurt by Aldi lifted its share of the spend at the tills to 12.6%, ahead of Lidl’s 12%.

“Brexit uncertainties and sterling’s struggles saw cross-border spend increase by 14% compared with this time last year, with much of that on fresh and chilled products.

“However, this still only makes up 0.6% of all sales and remains a small part of the market,” said Kantar’s Charlotte James.

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