Irish shoppers face further pressure as grocery prices in Britain surge

"Prices are rising fastest in markets such as savoury snacks, dog food and cat food, while falling in fresh bacon," according to Kantar.

Grocery price inflation in Britain surged in March, a major market researcher has disclosed, meaning that price pressures are likely to build further on this side of the Irish Sea.  

Researcher Kantar said its regular survey of supermarkets showed that grocery price inflation in Britain rose to 5.2% in March, the highest rate in almost 10 years.

Ireland imports many of its grocery items from across the Irish Sea and the British survey is a sign that the spike in energy costs is likely spilling across the economy. Many supermarket items are particularly exposed because they involve a lot of energy in their manufacture and distribution. 

Kantar publishes its Irish supermarket survey next week. Irish consumer prices had climbed to 5.6% in February and food price inflation was running at just under 3%. In Britain, Kantar said consumers are turning to own-label products which now account for more than half of all spending.

"What we’re really starting to see is the switch from the pandemic being the dominant factor driving our shopping behaviour towards the growing impact of inflation, as the cost of living becomes the bigger issue on consumers’ minds,” said Fraser McKevitt, head of retail, at Kantar. 

"Prices are rising fastest in markets such as savoury snacks, dog food and cat food while falling in fresh bacon," according to the market researcher. 

Grain prices

There was better news for wholesale food prices as the prices of global wheat and corn tumbled after Russia signalled it will ease its attack in some parts of Ukraine, one of the world’s key sources of grain.

Moscow has decided to cut military activity near the cities of Kyiv and Chernihiv, Russian Deputy Defence Minister Alexander Fomin said after bilateral talks in Istanbul. A pullback on Russia’s month-old invasion could ease some of the disruptions to global grain markets wrought by the war.

Wheat futures sank as much as 8% to $9.72 a bushel in US markets, dipping below the $10 mark for the first time since the beginning of the month. Corn extended its decline, falling as much as 4.7% to a four-week low. 

The declines could offer some reprieve for global food inflation, which has been accelerating at a rampant pace. Still, futures remain high historically and analysts cautioned the announcement may not be a quick fix for exports.  Ukraine ports have been shut since the war erupted in late February, stalling seaborne trade. 

“The problem we have here is we have peace talks progressing, but we still have a bunch of hoops to jump through in order for Black Sea exports to start improving, and that includes lifting sanctions on Russia and restoring shipping out of Ukraine,” said Terry Reilly, a senior commodity analyst at Futures International in Chicago.

Traders also are awaiting key reports from the US due Thursday detailing spring-planting intentions and quarterly grain stockpiles. The data will give an initial indication on how farmers are responding to both soaring input costs, as well as rising demand for crops from alternative origins amid the war in Europe. 

- Irish Examiner and Bloomberg