Supermarkets will be given six weeks to bring prices down
Amid the continuing cost-of-living crisis, Ireland's big retailers will be asked to show proof of the efforts they are making to bring down checkout prices. Stock picture
Mr Richmond will tell the major supermarket groups that they will have to show a “demonstrable reduction” in prices at the checkout, and that he will be expecting these cuts to be in place ahead of the next scheduled meeting of the retail forum on June 21.
Supermarkets and suppliers will also be asked to show proof of the efforts they are making to bring down costs for consumers.
Mr Richmond will also meet with farmers and producers on Thursday.
Despite repeated interventions by the European Central Bank since July last year, grocery price inflation in Ireland continues to remain consistently high, and is now running at 16.6%.
Dermott Jewell of the Consumers’ Association of Ireland said it is difficult to know what level of capacity the large retailers have to bring down prices, due to a lack of transparency around pricing.
The major supermarkets in Ireland do not publish figures for turnover or profit on a regular basis, and it is also unclear how much profit goes to producers, processors, and retailers in the chain.
“We need price transparency,” said Mr Jewell.
Taoiseach Leo Varadkar said on Tuesday that the major multiples will be told that “we expect you to bring down prices”.
He told the Dáil that Mr Richmond will be “passing on a very clear message from Government — when input prices like energy costs went up, retailers increased their prices, and that’s understandable, but when input costs go down, we expect you to pass on those reductions to your customers.
“We’re making that very clear to the retailers, to the big supermarkets and shops — and also to the energy and gas companies,” he said.
While the option of setting prices is open to the Government, this is viewed as a “nuclear option” which the Coalition would be cautious about implementing.
“We are not at that point yet, and we don’t want to get to that point,” Mr Richmond said of imposing price caps, before adding that he would be “ideologically averse” to such a move.
It is expected that Tesco and the Musgrave Group, which includes Supervalu and Centra, will tell Wednesday’s meeting that energy costs and commodity prices being seen around the world have pushed up the cost of everyday essentials.
The retailers will also tell the minister that they appreciate the challenges facing customers, but they are doing everything they can to minimise the impact of inflationary pressures.
Last month the chief executive of Tesco in the UK, Ken Murphy, pushed back at suggestions of profiteering after the publication of the retailer’s results for the year 2022/2023, which showed its pre-tax profits dropped by over 50% to £1bn (€1.14bn) during the year despite revenue growing from £61.34bn to £65.76bn.
Dunnes Stores last published annual results in September 2022, while the Musgrave Group published its results in November, so it will be months before the impact of price inflation on their balance sheets is known.
In the Dáil, Sinn Féin accused the Government of “sitting on its hands” while families in Ireland struggle with the cost-of-living crisis.
Mary Lou McDonald said households are hammered by energy bills, soaring food bills, runaway rents, mortgage interest rate hikes, and a cost-of-living crisis that is hitting them from all sides.
