In the papers this week 18 – 24 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

Grocery prices are down 20%; Tesco making strides to become a standalone bank; Irish fisherman criticise McCarthy plan to get rid of BIM



23 July 2009

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The supermarket price war has indeed made a difference in the cost of both branded and own-brand goods, reports The Irish Times, with reductions in every multiple in the last six months.

According to the National Consumer Agency, Tesco has had the greatest price decrease at 15% but Dunnes just edges the UK retailer out for the cheapest basket of branded goods.

Aldi and Lidl are neck and neck for cheapest own-brand products. NCA also reports that almost half the items in their baskets had the same prices in Dunnes, Tesco, and Superquinn.

Tesco is making strides towards becoming a standalone bank, reports the Financial Times. The company is planning to launch a current account and mortgage within the next two years, and is now considering a separate credit rating for its financial arm, Tesco Personal Finance, which would allow it to borrow directly from the market rather than through the parent company. This practice, known as wholesale funding, is Tesco’s attempt to draw on the public’s anger at banks and become the "people’s bank".

After last week’s Central Statistics Office report that the cost of living is dropping as consumer purchases drop, Retail Ireland warns that up to 25,000 jobs could fall with it. As The Herald recaps, the report said that overall retail sales are down 9%, and 4.6% in food sales. Although consumers are benefiting by seeking out bargains, Retail Ireland predicts a huge number of jobs will be lost if this level of controlled spending continues.

Irish fishers are criticising the McCarthy plan’s proposed closure of Bord Iascaigh Mhara, which they say is "central" to aquaculture. Although the Department of Agriculture, Fisheries and Food would absorb BIM’s role, members of the Irish Farmers Association Aquaculture Division and the Federation of Irish Fishermen say that the separate department is essential for job creation. Currently, BIM employs 11,000 and had €731m in total sales last year, The Irish Times reports.

The Irish Times also reported that the Department for Agriculture, Fisheries and Food will be funding €16m for Irish poultry producers to improve the conditions of their hen cages. In response to pressure from welfare organisations, the EU is requiring all poultry farmers to have made the switch to ‘enhanced’ cages by 2012. These cages will be roomier and have a nest, litter, claw-shortener, and perch. The Irish Egg Association has remarked that it is grateful for the contribution, which is "vital to help secure the future of the Irish egg industry."

Wal-Mart and its British subsidiary Asda plan to include eco-aware labels on their products that will inform consumers of the environmental impact of items and companies, writes the Daily Telegraph (UK). The labels won’t appear for a few years because in the meantime they are requesting that their 100,000 suppliers provide information on their water use, air pollution, packaging, and carbon footprint. The information will be compiled into an index and transcribed into customer-friendly ‘green ratings’. Wal-Mart will not exempt any supplier from the index.

Salmonella-contaminated sesame seeds have been recalled for the second time in two weeks, reports The Herald. Kestral Foods of Northern Ireland supplied the seeds which are part of the following products: Supervalu seed mix, Supervalu sesame seeds, Centra seed mix, Forest Feast sesame seeds, and Tesco Wholefoods seed mix. These products are being removed from shelves, and anyone who has already purchased them are advised not eat them.

Pat Kinsley of Neworld Associates has submitted part one of two in his series on Irish goods over imported products. While many consumers are shopping around for the cheapest own-brand items to stay within their adjusted budget, Kinsley touts the importance of country loyalty today, remarking, "Proud, confident Irish brands can act as a support and provide a sense of stability in an otherwise confusing climate."  

As consumers draw up budgets and watch their spending, even former hygiene staples are getting hit hard by the recession. Shampoo and conditioner sales have dropped a total of £15m since last year, and are expected to keep falling an extra £6m before 2010, reports the Daily Telegraph (UK). Conditioners especially are being left on shelves, with 14% of female shoppers cutting back on hair care to save money. A Mintel beauty analyst says that cost-wary women may be drawn more to products with long-lasting results, and in the meantime the industry should remind consumers of the benefits of conditioning hair care.

Origin Enterprises, the holding group for such companies as Odlums, Shamrock Foods, Boland Mills, and RH Hall, has been approved for a €104m share capital reduction. Origin applied for the reduction after the value of many of its properties was written down. Because the company can remain profitable even with the reduction, says The Irish Times, it has had its capital share reduced to €160.4m.



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