Dermott Jewell: Consumers need more clarity about why so many prices are rising
For over 20 years, the Consumers’ Association of Ireland has been tracking the price of an average basket of supermarket goods.
Unsurprisingly, the March survey reflected an increase of just over 4% in prices since 2019. I say "reflected" because within weeks the same basket had risen 7% and, as confirmed by the latest reading of the CSO Consumer Price Index, consumer price inflation continues unabated.
By this stage we have come to accept, in general terms, that the Ukraine war, restrictions from the pandemic, Brexit, and numerous other economic sanctions, are pushingup consumer prices.
However, we are still struggling to understand how to effectively cope with the fallout on household budgets and the lives of our families.
The Consumers' Association asked in an online questionnaire how inflation affects the average consumer: The answers showed that unevenly rising prices inevitably reduced the purchasing power of many consumers and, importantly, distorted their ability to pay. The reality is that there has been a loss in consumer confidence.
Consumers need clarity and transparency in everything that affects their ability to make ends meet in the future.
The Government has stepped in to mitigate the impact of energy, fuel, transport and other areas where costs have risen to eye-watering and life-altering amounts. Food prices remain an exception.
The Consumers' Association survey also showed the tendency of manufacturers to shrink package sizes over the years. This means that we have had to recalibrate the prices in our surveys.
Indeed, manufacturers have altered their package sizes so many times, that our basket of goods requires major work to find the appropriate package sizes to gain an accurate view of the comparable prices for a number of products, even since our earlier survey in 2019.
"Shrinkflation", as it is termed, frustrates and challenges the consumer and, in a crisis of inflation not experienced in over 20 years, only serves to add to levels of distrust.
We must have transparency in pricing across all sectors: For consumers to cope, they must be able to make informed choices.
For food, discounted offers are significantly down too.
The Consumers' Association survey in 2019 showed that three major supermarkets had 17 price promotions or discounts across eight different products. In 2022, there were only seven price promotions involving five products.
When we were younger or answering questions raised by our children as to why we were making demands of them or passing on difficult choices, the answer was often came out as "because".
We knew then it was not the correct answer and that is precisely the case now. There is a parallel here in the way that Irish consumers have been left in the dark for many years.
A lot of effort was put into having the EU Market Transparency Rules put into Irish law last year. The intention is to bring a focus to price reporting obligations and transparency to all elements of the food supply chain.
In March, the Cabinet approved the appointment of an independent food ombudsman for Ireland, and the consumer will finally play a part in this long-awaited office.
Expectations are high in terms of transparency in pricing across the chain of supply. The Consumers' Association looks forward to engaging with the ombudsman as soon as it is possible.
The CSO in compiling its basket of goods and services correctly and fairly outlines that there are different household tastes and needs.
This explains why the CSO produces an average rate of inflation representing the "average consumer".
However, when it becomes a reality that some households have to choose between heating their homes or eating, then we must be able to look behind the curtain and find out how consumer prices are set.
At this time of stress for many consumers, we need a better idea of the factors driving the prices we pay at the tills and the profits retained.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
