Food sales down and inflation falling
Food sales and food prices have fallen since October, according to the latest data from the CSO which puts the Consumer Price Index under 5%
9 December 2008
Recent figures from the Central Statistics Office show that food and beverage prices have been on a downward trend since October, when food inflation levels were recorded at 4.6%. The decline comes after months of rising food inflation, which reached a high of 9.3% in March this year.
The gradual shrinking of food and beverage prices has been attributed to falling commodities costs on the global market, as well as the slowing down of economic activity in general. Sales of food in Ireland are currently down almost 3% compared with last year, which mirrors the decline in consumer spending across multiple sectors at present.
According to Food and Drink Industry Ireland, the fall-off in Irish food inflation, coupled with the August spike (12.3%) in the UK, raises the question of whether or not food inflation in both regions has peaked? Price competition between multiples in both markets has intensified and, as the Christmas period looms large, it is likely this downward trend for food prices will continue.
While this spells good news for consumers, the situation is not looking positive for manufacturers or retailers.
The recent Wholesale Price Index data from the CSO shows that manufacturing prices rose 2.6% in the year to October, with the WPI increasing by 1.2% compared with a 0.7% decrease at the same time last year. According to the CSO report: “Contributing to the annual change were increases in other food products including bread and confectionery (+9.7%).”