In the papers this week 11 – 17 July 2009

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Mayor of the City and County of Limerick, Cllr Gerald Mitchell cuts the ribbon at the opening of the new Tesco store on Kileely Road, Limerick, Pictured with with store assistants Rachel Judge and Gemma Morrison, store manager, Michael Fitzgerald and Dr. Pat Daly, chief executive of Limerick City & County Council. Pic: Don Moloney

The NCA proposes grocery price database to help the Irish consumer; Ireland's cost of living still highest by 20%; RGDATA speaks out about Tesco's "misleading" claims

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20 July 2009

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An online grocery price tag database has been recommended by the National Consumer Agency, reports The Irish Times.

The agency has asked Tesco, Spar, Dunnes Stores, Superquinn, Supervalu, Aldi, and Lidl to consider contributing to a website that would provide real-time price comparisons of branded and private label products.

The NCA hopes the database would not only allow consumers to seek out the best deals but also improve the image of retailers as collaborators.

The cost of living in Ireland is falling at the fastest rate in the European Union, but it is also still the highest, by 20%. The Sunday Tribune reports that prices have fallen 1.7% here in the last year, a rate not seen since the Great Depression. Unfortunately, as the Tribune reported last week, many of the price cuts in groceries have been due to suppliers caving into non-contractual demands from the retailers.

Glanbia’s recent profit announcement revealed the heavy toll the global dairy market crisis is taking on exposed businesses, says The Irish Times. The group, which owns brands Avonmore, Yoplait, and Kilmeadan, has announced that the first half of the year has been "challenging." The group reassured investors in the announcement, saying that in spite of the supermarket price wars and lower expectations than in 2008, it is performing reasonably well in Ireland.

Another group seeing difficult times in Ireland is Britvic, whose sales fell 20% in the third quarter. The Irish Times reports that the drinks group’s revenues are down 24.3% as well, although April had been a strong month. Ireland has been a tough area for the company, but it has actually seen a 5.9% year-on-year increase thanks to strong sales in the UK and internationally.

In the UK, the Competition Commission is hoping to implement a new test on stores over 1,000 square metres, reports The Irish Times. It is to ensure that any new or extended supermarket within a 10-minute drive of another does not have more than 60% of local grocery sales. The increase in competition, says the commission, will result in savings of £1.9 billion to consumers over 25 years. Tesco is not in favour of the move and claims the new test has not been researched well enough to be beneficial to customers.

Meanwhile, Tesco’s latest price cut campaign continues to be a controversial topic in Irerland, says The Irish Times. Independent grocers organisation, RGDATA has spoken out against the retailer’s "misleading" promotions. Tesco has been under fire in the past few weeks for apparently not keeping to its Change for Good promise, with some prices rising once again. RGDATA has asked the National Consumer Agency to investigate the validity of Tesco’s claims in order to determine whether its dropped prices are acceptable.

After last week’s meeting with shareholders and investors to re-examine the company’s finances, O’Brien’s Sandwich Bars has decided to close nine Irish stores, reports the Sunday Business Post. Of the 54 branches, 33 still owe rent on their premises, for which O’Brien’s is currently responsible rather than the individual branch. An examiner has 100 days to reorganise the company and save it from bankruptcy.

The Kavanagh Group is looking to bring its store total to 17 by adding two more English supermarkets to its chain, says the Sunday Business Post. It currently operates in Ireland, Northern Ireland, and England under the Supervalu and Budgens names. The family-run group felt the financial squeeze in Ireland due to border-crossing shoppers, with Irish sales dropping 13% from 2007 to 2008, but they say they "will just work hard and sweat our assets" to ride out the recession.

 

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