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Food

Shoppers pay more for frozen food and healthcare products as inflation bites

Monitoring Desk

SQUEEZED supply lines coupled with higher energy costs are fuelling inflation for key grocery items, new figures published this morning show.

Research group Kantar said that the average price of healthcare products has soared 8pc compared to last year. Prices of hot beverages are up 5.1pc and the cost of frozen food has jumped 4.6pc.

It said that overall grocery inflation hit 0.6pc in the 12 weeks to October 3. While that figure appears relatively low, it’s the highest rate since March this year.

The rising cost of key goods comes as logistics chains become strained and overall inflation in the Eurozone rocketed to 3.4pc last month – way above its target of 2pc and the highest rate in 13 years. The European Central Bank has warned that the rate could hit 4pc by the end of the year before decline in 2022.

The latest Kantar data shows that consumers are visiting supermarkets less often as relaxed Covid restrictions give them more options for spending their time.

And while overall grocery sales have continued to ease against tough comparators from last year, spending still remains 9.4pc higher than in 2019, before the pandemic struck.

It said that total grocery sales in the 12 weeks to October 3 declined 2.2pc compared to the corresponding period last year. That fall follows a 2.3pc year-on-year decline in the 12 weeks to September 5.

But online grocery sales have climbed again following a notable decline, according to Kantar.

Online grocery sales rose 7.1pc in the last four weeks, it said. It attributes the rise to people having less time to shop in store.

Its previous research had shown a 12.3pc decline in online grocery sales in Ireland in the four weeks to September 5.

Earlier this month, Tesco said that its online sales in Ireland have jumped 75pc between 2019 and 2021, and were 10.8pc higher half way through its current financial year than they were a year ago.

Emer Healy, a retail analyst at Kantar, said the latest figures paint a “nuanced picture” for the grocery market.

“The lifting of social restrictions and high vaccination rates means shoppers are more comfortable going out and visiting physical stores, but they also mean people’s social calendars are filling up again,” she said.

“More socialising means we’re living less regimented lives, and with more eating at restaurants, pubs and on the go, the reliance which many had on supermarkets to get their meals last year is starting to fade,” Ms Healy added.

Kantar said that despite increased prices, consumer confidence remains high. It said that Dunnes Stores was the only retailer to recruit new shoppers in the latest period, while Tesco performed well with premium items.

SuperValu, which is controlled by the Cork-based Musgrave group, retained its pole position in the grocery market, with a 22.3pc share. Dunnes was second, with 21.9pc, while Tesco had 21.4pc.

Aldi had a 12.8pc share of the market in the 12-week period, while Lidl had 12.7pc.

Sales of pumpkins jumped 32pc in the latest 12-week period compared to last year, with sales of confectionery also strong as Halloween approaches.