'Big shop’ shock as rising grocery prices start to bite 

After a long era of low inflation, Irish people are once again feeling the impact of soaring food prices

Older people will recall double-digit inflation in Ireland in the early 1980s, but younger people are shocked by rising prices and the sudden effect on what they can afford. Stock picture

For years, most of us could afford to ignore the small print on the back of our energy bills.

Most of us hadn’t a clue what a standing charge was, much less a unit charge. We didn’t have to know the exact price of a litre of milk, a kilogramme of carrots, or a packet of spaghetti.

The cost-of-living statistics went largely ignored, inflation was something our parents had memories of.

But that’s all been turned on its head in the past 12 months.

We’ve started to pay attention again. We see figures getting thrown out regularly, such as the latest Consumer Price Index rise of 8.2% announced this week.

What it means in effect is that the €50 in our pockets is not going nearly as far as it did this time last year. And all indications show that prices are going just one way — up.

Market research specialists Kantar have warned consumers that the price of a basket of goods will rise by €768 per annum up to €7,753 unless they make changes to how they shop.

Those rises have been evident in every supermarket aisle in the last 12 months.

Indeed, food inflation stands at over 10% which is two points higher than the general inflation rate.

The big shop

An analysis of the CSO’s latest data on the national average price of what could be considered a “big shop” — consisting of the likes of bread, milk, cheese, rashers, sausages, chicken, fruit, vegetables, etc — is €11 dearer now than it was in January 2019. 

The effect of inflation hits home when we notice that a litre of milk costs 41c more than it did last year, and the makings of a fry have gone up about €2. Picture: iStock 

In the last year alone, the average price of a large pan of white bread is up 26 cent. If a family buys two pans a week, for example, that’s an extra €27 they’re paying a year just on bread.

That might not sound like a lot, but take that price rise with how much dearer milk is (up 41c), and cheese is (up €1.23 per kg), and spaghetti is (up 31c per 500g) to name just a few, and it all adds up very quickly.

What else has gone up? A pound of butter is up 67c, a dozen eggs are up 12c, and a medium size chicken is up around 90c.

The cost of the makings of a full Irish fry-up is around €2 dearer than last year. For those who like a tipple, that’s gone up too with the average can of lager up over 20c and a bottle of vodka up nearly €3.

Indeed, the CSO told us earlier this year it predicted that our grocery bills would rise by €780 this year.

More recent analysis from Kantar suggested a similar figure of around €768, meaning the average annual grocery shop stands at around €7,750. The Consumers’ Association of Ireland suggested that such a rise would “break families". 

“At best it will determine some very significant changes in the manner in which people live,” said policy adviser Dermott Jewell.

“The reality of life is that there is only x amount of money which can be spent on a finite amount of products, and if prices keep going up like this then you have to either cut back or cut out what you’re buying.”

Doras CEO John Lannon points out that food price rises come on top of soaring rents. 

All of this is having an impact, which is being reported from a variety of different sources.

A survey published this week by Too Good to Go, an organisation calling for an end to food wastage, suggested that 88% of Irish people say increasing food prices were a problem for their budget.

It’s people aged 25 to 44 who are particularly feeling the pinch, with 93% of this age group saying it’s a problem for their budget.

Despite this, the survey found that, on average, people in Ireland waste nearly €600 worth of food a year, with people in Cork wasting the least at €472.

Organisations working with vulnerable households have been saying for over a year now that they’re in contact with families who are often choosing between heating their home and buying food. When the price of both are going up, it’s far from ideal.

St Vincent de Paul’s head of social justice, Tricia Keilthy, said people coming into contact with their service were saying their shopping basket has been getting “smaller and smaller”.

Barnardos national policy manager Stephen Moffatt said his organisation’s main worry is that things will be “even worse” for families and children this year with the cost of essentials so much higher than 12 months ago. 

“A lot of families were saying they were putting children to bed with coats on,” he said.

“For three days in a week, they were eating just tinned food. 

Families are telling us they’re being careful about how often they put a wash on, or asking how much their fridge is costing them.

He also said families have been knocking on their doors seeking food vouchers.

“All of our services are saying this is really concerning,” he added.

Doras, an organisation supporting migrants and refugees in Ireland, has also been raising the issue of food prices and the impact it is having on families they are in contact with, with reports of food poverty on the rise.

“It’s clear the housing emergency is worsening and driving a new level of deprivation that is leading to not just homelessness, but also hunger,” Doras CEO John Lannon said.

People simply can’t afford the exorbitant rents being asked by landlords and state supports are generally inadequate. 

There could be a sliver of hope on the horizon, with the UN saying last week that global food prices fell for the sixth month in a row in September.

But, while global issues are certainly a factor feeding into the problem here, this isn’t translating to cheaper goods in our supermarkets at the moment.

And where are people doing their shopping? There’s certainly not been a wholesale move to the cheaper retailers, as of yet anyway, with the market share for the different supermarkets broadly similar to how they’ve been historically.

Kantar’s data in the 12 weeks to the beginning of September shows Dunne Stores leading the way with a 22.3% market share. Tesco is on 21.9%, with Supervalu on 21.4%. Lidl and Aldi, meanwhile, are on 12.3% and 12.7% respectively.

‘There is only x amount of money which can be spent on a finite amount of products, and if prices keep going up like this then you have to either cut back or cut out what you’re buying,’ said Consumers’ Association of Ireland policy adviser Dermot Jewell.

For all these retailers, the amount actually being spent in their shops has increased significantly in recent times. Compared to 2019, they’ve all recorded double digit growth with an average of 16.4% increase in their sales.

In the four weeks to September 4, the price of back-to-school lunchbox essentials such as bread, ham, cheese, yoghurt, cereal, and milk all rose by 19.5% making a typical basket of these items €2 more expensive.

Kantar said that shoppers had spent an additional €17m on these products compared to the same time last year, but this was entirely driven by price as the actual volume of sales were down 6%.

But if households are often shopping in the same places, they are trying to be more savvy with their weekly shop.

The analysis also noted how consumers are looking for better value amidst the cost-of-living surge and turning to supermarkets’ own-label brands. In the last 12-week period, sales of own-label products were up 5.8%.

On the very cheapest products, value own-label ranges, sales were up 21.4% compared to the same time last year.

Kantar senior analyst Emer Healy said that grocery price inflation “is at its highest level since [we] began tracking grocery price inflation in May 2008”.   

“As food and drink prices continue to climb alongside increasing pressure on other household bills, the impact is unavoidable for many Irish consumers,” she said.

Kantar senior analyst Emer Healy says grocery price inflation is at its highest since Kantar started tracking it 14 years ago.

As noted by the St Vincent de Paul research into the minimum essential standard of living metric, which calculates the amount needed for a very basic standard of living, food accounts for a significant proportion of what we need to spend week-to-week.

In urban areas, the amount needed to achieve this basic standard of living is forecast to rise 11% by the end of 2022.

“This increase is being primarily driven by rising prices in the areas of home energy and food,” said SVP.

All households in the country are set to get €600 to help with their energy bills in the coming winter. But no household is getting such direct Government support to pay for food.

As charities supporting low-income families say they are hearing more and more from families needing help to buy the very basics like food, it is clear that this has become and is a major issue facing households across the country.

And that grocery bill is certainly going to be putting a bigger dent in our pockets for some time to come.