Ireland

Tesco price cuts could mark ‘significant turning point’ for consumers – McGrath

Finance Minister Michael McGrath arriving for a cabinet meeting at the Government Buildings, Dublin, where ministers are gathering to formally sign-off on a spring cost-of-living package. Picture date: Tuesday February 21, 2023.
Finance Minister Michael McGrath arriving for a cabinet meeting at the Government Buildings, Dublin, where ministers are gathering to formally sign-off on a spring cost-of-living package. Picture date: Tuesday February 21, 2023. Finance Minister Michael McGrath arriving for a cabinet meeting at the Government Buildings, Dublin, where ministers are gathering to formally sign-off on a spring cost-of-living package. Picture date: Tuesday February 21, 2023.

A wave of price cuts announced by Tesco could mark a significant turning point for consumers in Ireland, the finance minister has said.

Michael McGrath expressed confidence other retailers will follow suit after Tesco Ireland moved to reduce prices, by an average of 10%, on 700 products.

Mr McGrath predicted grocery prices will begin falling across the board after 18 months of soaring inflation.

“These reductions are very good news for consumers,” he told RTE Radio One.

“And I think they’ll be warmly welcomed. Everybody has seen the really significant spike in prices over the last 18 months or so, so this could be a significant turning point in relation to grocery prices for consumers.

“We know that people are very price sensitive, they will shop around and they will vote with their feet and I would expect that other significant retail providers in the grocery space will respond – but that’s a matter for themselves.

“But people certainly will respond to good offers and, I think, will adjust their shopping patterns accordingly.”

Mr McGrath said the Government will have further talks with retailers in the coming weeks through the retail forum chaired by minister of state Neale Richmond.

“This is very welcome progress,” said Mr McGrath.

“I think consumers will be relieved to hear this but they will expect others now to follow suit.

“But it is in the context of where input costs fall. We do expect and this is the point that Minister Richmond and others made was that as input costs fall, we do expect the retailers to pass on the benefit of that to consumers.

“So this is potentially quite a significant turning point, given the number of products that are going to benefit from this reduction and given the market forces that are there and the price sensitivity of consumers.

“I think it’s only a matter of time before other grocery providers respond.”

Joe Manning, commercial director at Tesco Ireland, said the company is responding to falling supplier costs.

“Committing to discounts across a hugely diverse range of items including grocery staples, household products and family favourites demonstrates our continued commitment to offering great value and means customers can expect to find savings in almost every aisle in store or online,” he said.

“We also work very closely with our suppliers to manage their input inflation and their cost price pressures. As our costs are reducing from our suppliers, we are now able to pass those savings on to our customers.”