Shoppers to gain as supermarket war hots up

WITH the cost of living falling at the fastest rate since the middle of the Great Depression, it appears consumers can look forward to even more price cuts as the supermarket price war intensifies.

Inflation figures from the Central Statistics Office show prices fell 3.5% last month from a year earlier – the biggest decline since 1933.

The biggest driver was a nearly 40% annual drop in mortgage interest costs.

Rent prices are down 14% while clothing fell 13% and shoe prices dropped 11%. Petrol prices have fallen 11% in the year and diesel is down close to 19%.

Prices for nightclubs are down 2% while airfares dropped almost 10%.

There were some areas, however, where consumers have been forced to pay more. Cigarette prices are up 12% in the year, gas prices 20% and electricity 17%. Doctors’ fees are up 5%, rail costs 9% and bus fares 11%. Also, insurance costs have soared 18.5% in the year.

Ulster Bank economist Lynsey Clemenger expects prices to fall an average of 4.3% this year.

Meanwhile, Aldi joined the retail price war by slashing prices in every store across the country. The reductions, on more than 230 items, are expected to be fully in place by Monday.

The move comes after the decision by Tesco last week to cut prices at 11 of its border stores by importing directly from Britain. The reductions are expected to be rolled out across all its Irish stores in the coming weeks.

A number of other retailers, such as Lidl and SuperValu, have responded, implementing price cuts of their own.