We are paying an ever higher price for our groceries here in Northern Ireland as grocery price inflation hit a high of 16.9% in the year up to September 3rd, with average food and drink prices up 10.7% compared to the previous year.
Higher Grocery Bills, Energy Bills And Interest Rates
This is putting extra pressure on households as they are still coming to terms with the rise in their energy bills combined with the rises in interest rates. And if the rumours are correct the Bank of England will be hiking up the rate of interest once more later this week, the base rate is due to go up another quarter of a % to 5.5%.
But the higher prices for groceries doesn’t seem to have stopped consumers from buying, as sales in the Northern Ireland grocery market was up 10.5% over the same 12 month period. Shoppers here have spent an extra £385.7 million in this time, which has made many supermarket chains pretty bullish about their future growth. Many supermarkets are taking on extra staff with some, such as Chinese-owned brand MINISO, looking at opening new branches.
Supermarket Margins Are Very Tight
But Neil Johnston, director of the NI Retail Consortium, was more cautious about the prospects for the future when he spoke to the Belfast Telegraph. He said:
“When it comes to property, prices are very unpredictable, particularly for retail. And on the retail side, it’s very tough.
“Supermarkets are not really making huge margins at all. And all retailers have faced such huge costs shocks, from energy to labour costs. Overall, we’re still in a challenging environment but that’s not to say there won’t be retailers who are in a position to expand.”
Continuing To Reflect Pressures Of Rising Prices
And Emer Healy, retail analyst at Kantar, said consumer habits were continuing to reflect the pressures of rising prices. She is quoted in the same article, talking about seasonal trends, saying:
“With back-to-school preparations in full swing for many, typical lunch box categories soared over the 12 weeks.
“Shoppers in Northern Ireland spent an additional £3.6m on cheese, £3.5m on yoghurts, £3.1m on bread and £4.8m on biscuits.”
It has been a very tough year or two for households up and down the country, which in turn has made it extremely difficult for businesses to keep their head above water. Let us hope that the bulls rather than the bears hold sway over the next 12 months.