Survey faults official data on inflation

Inflation is running well ahead of Central Bank estimates, according to a snapshot survey of retail prices by an industry newsletter. In a 17-product survey comparing prices between July 2001 and June 2002, Dunnes Stores showed a 14.6 per cent price rise, while rival Superquinn showed a 12.49 per cent rise in a 19-product comparison over the same period. Tesco, on an 18-item comparison, showed price rises of 10.6 per cent.

While the survey was a limited sample carried out in supermarkets in north Dublin, Retail Intelligence Newsletter's editor-in-chief, Mr Terence Cosgrave, said it indicated that the changeover to the euro had triggered price rises.

"We look at this as an indication, a snapshot," said Mr Cosgrave.

"We're trying to get a rough guide and it works across a range of products - it's not just one product - and the increases are substantial."

A separate survey commissioned by the newsletter and carried out by MRBI showed that four out of five Irish people felt the introduction of the new currency caused a rise in prices beyond normal inflation rates.

"This suggests that the inflation rate the Central Bank and the Government are looking at is an illusion," said Mr Cosgrave.

The analysis of retail prices revealed that fresh fruit and vegetable prices rose most dramatically over the period. For example, tomatoes at Dunnes Stores rose by 41.6 per cent in 11 months, while a medium-sized cucumber jumped around 90 per cent in price over the year, according to the analysis. The price of Johnson Baby Oil, a product where direct price comparisons can be made, rose in all stores by 33 cents or 10.4 per cent, it said.

Both surveys indicate that consumers feel retailers or manufacturers have used the introduction of the euro to raise margins by increasing their prices, said Mr Cosgrave.

"The vast majority feel there has been a significant jump in inflation over the past six months," he said.

In further bad news for retailers, the MRBI survey of 1,000 people from all over the State showed that 85 per cent of housekeepers, 91 per cent of people aged 45-54 and 81 per cent of women - who in three out of four cases in the Republic do the main family shopping - believe the euro has caused a rise in prices beyond normal inflation.

"The results will have implications for the Government, which will come under pressure from unions to increase pay in line with people's perceptions that they are paying more at the checkout," said Retail Intelligence Newsletter.

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