The National Consumer Agency (NCA) today published the findings of its latest, and largest ever, branded Irish grocery price survey. The survey compares the price of a basket of 103 branded grocery items in Tesco, Dunnes Stores and Superquinn, and a basket of 87 items when SuperValu is included. The survey shows that the multiples prices have dropped in the region of 14% between January 2009 and July 2010.

The results show virtually no price difference on branded goods between Tesco, Dunnes Stores and Superquinn, with a difference of only €1.14 or 0.4% between the cheapest and most expensive for a basket of 103 items. The cost of this basket was cheapest in Dunnes Stores at €279.62, and most expensive in Superquinn at €280.76. The cost of the basket in Tesco was €280.69. This compares to a price difference of 4% in July 2009 between the cheapest and dearest for a basket with 68 items.

On the basket of 87 common products surveyed across Tesco, Dunnes Stores, Superquinn and two SuperValu stores, the total difference between the cheapest and most expensive was €5.75, or 2.4%.

Commenting on the findings, Ann Fitzgerald, Chief Executive of the National Consumer Agency said, “The results show that while grocery prices have dropped across the board, over the past 18 months, there is evidence that the most powerful retailers in the State, between them controlling 70% of the market, are still price matching in core branded items to a significant degree, albeit at much lower levels than in 2007 and 2008. This suggests that competitive pricing is still not a feature of the Irish grocery market and to address this there is a real need for a new entrant to the market to offer consumers a real alternative.

”The latest survey reveals that while the principal retailers have reduced the price of core branded items over the last 18 months, the rate of reduction has now slowed and retailers are now competing mainly on the basis of special offers and promotions and by juggling frequent but small price changes on individual items."

At the time of the survey, there were 36 special offers, including monetary offers, available in Dunnes, Tesco and Superquinn. This compares to 18 in June 2009 and seven in January 2009. In the latest survey, 48% of products in the comparison of Tesco, Dunnes and Superquinn had identical prices, compared to 71% in June 2008.

Fitzgerald commented, “In the past year we’ve seen a dramatic increase in the range of special offers by the multiples, but we would prefer to see sustained price cuts, as would consumers. Our latest market research showed that 81% of respondents said they would prefer to see long-term lower prices. Retailers have always argued that the reason for promotions in the Irish market is that consumers want them but our research contradicts this and shows that like the NCA, consumers want long-term price cuts rather than the hi-low pricing associated with special offers.”

IBEC's unit Retail Ireland 's director Torlach Denihan said: "The fall in grocery prices clearly demonstrates the value available to Irish consumers. There is no longer any reason to go North to shop.

"Retail Ireland however takes issue with the attack by the National Consumer Agency's chief executive on the extent of competition in the grocery sector. It stands logic on its head to highlight a 14% price fall over the last 18 months and then suggest that there is a lack of competition in the market. How can a State agency complain after we have experienced the largest price falls in the Eurozone? This smacks of an agency struggling to justify its existence."

Maybe it also smacks of the expected reaction of a paid agent of the retailers and why should it be a surprise that prices would fall from an excessive level during a deep recession?

Prices may have fallen but they are still high in a European context:

SEE: Finfacts article, June 2010: Prices of food and non-alcoholic beverages 39% above EU27 average in Denmark in 2009; Ireland was 29% ahead; Netherlands, Spain and UK were up to 10% below