In a rare move, top retailers in Ireland have slashed prices on two grocery essentials, giving consumers a much-needed break. The action began with Lidl’s announcement that it would be reducing prices on its own-brand milk by about 4% at 6 pm on Friday, which prompted Aldi, Tesco, and SuperValu to follow suit within just six hours. A similar event unfolded when Tesco announced on Wednesday that it would be dropping the price of its 454g packets of own-brand butter to €2.99, with rival supermarkets immediately joining the price reduction. While the two price cuts won’t have a significant impact on household budgets, they have sparked a crucial discussion on grocery pricing and when consumers can expect to see a decline in the cost of their weekly shopping.
Although Kantar’s figures this week showed a meager 0.2% decrease in grocery inflation from 16.8% to 16.6%, Taoiseach Leo Varadkar has sent a clear message to the retail sector that “grocery prices must come down if their input costs come down.” The Retail Forum, made up of industry groups, academics, and civil servants, is a crucial player in determining whether this message will be taken seriously. However, independent voices representing consumers are notably absent, and some have criticized the group as a “talking shop” with little power.
The Competition and Consumer Protection Commission is another potential avenue for addressing supermarket pricing concerns, but it is limited in its ability to take action unless collusion on pricing is suspected, which few voices are suggesting is the case. The government could utilize provisions within the Consumer Protection Act 2007 to impose price controls on certain products in emergency situations, though this is a controversial move that is up for debate. Ultimately, the elephant in the room is profit, making it challenging to know how much Irish supermarkets make from Irish shoppers. Getting answers on pricing fairness from supermarkets themselves could be a crucial step towards a different place in grocery pricing.
