Pricewatch’s 2021: An expensive year for consumers

Covid, Brexit, rising energy costs and supply chain issues combined to put the squeeze on

Stephen’s Green Shopping Centre in Dublin in May. Non-essential retail was shuttered for much of the first half of the year. Photograph: Artur Widak/NurPhoto via Getty Images

Stephen’s Green Shopping Centre in Dublin in May. Non-essential retail was shuttered for much of the first half of the year. Photograph: Artur Widak/NurPhoto via Getty Images

 

There is no sugarcoating it. Between Covid, Brexit, supply chain issues and spiralling energy prices it was a tough year for the Irish consumer, as our pretty gloomy look-back makes all too clear.

JANUARY

The UK finally leaves the EU after what seems like several lifetimes of wrangling, and almost immediately it becomes clear that getting Brexit done is not going swimmingly. Percy Pigs become a most unlikely and bizarre poster child for its impact on consumers, with Marks & Spencer warning that the price of its popular jellies could climb in Ireland because they are made in the EU rather than the UK.

Brexit-related teething problems are also blamed for dozens of Arnotts shoppers being hit with additional taxes after buying shoes on the department store’s website, while Irish customers of Currys/PC World are left asking where in the world their products are and why they have to pay import taxes and charges on things bought from a retailer with a significant Irish footprint. More teething problems, we are told.

Scam artists, smelling blood, begin exploiting a surge in messages from delivery companies seeking Brexit-related taxes and charges by sending out bogus alerts looking for financial details from unsuspecting consumers.

All non-essential retail is closed as one of the longest and strictest lockdowns in the world starts. We don’t know it now, but it will be the summer before things start to open again. Even click-and-collect is banned – although that seems to have been missed by Dunnes Stores, which operates a “reserve and collect” service for clothes and homewares from its website. The service is briefly discontinued after the retailer is contacted by this newspaper.

AIB, Bank of Ireland, Permanent TSB and KBC join forces to launch an instantaneous digital payments app so they can go toe- to-toe with platforms such as Revolut. The Competition and Consumer Protection Commission (CCPC) says it wants to have a look at it. It’s still doing that today.

Irish home-buyers are still paying more than their European counterparts for basic mortgages, with the average rate charged on new mortgages here 2.79 per cent compared to a euro area average of 1.31 per cent. That difference can cost Irish consumers as much as €80,000 on a €300,000 mortgage over 30 years.

FEBRUARY

News breaks that Amazon plans to open one of its “fulfilment centres” in Ireland in a move which could forever reshape retail here. The 650,000sq ft unit will be located at the Mountpark logistics centre in Baldonnell.

NatWest announces that Ulster Bank is to close its operations in the Republic. The bank has 2,800 employees, more than one million customers and 88 branches. NatWest signals that its departure will be gradual.

The promise of an accelerated Covid-19 vaccination programme, which could see more than 80 per cent of adults offered at least one dose by June 30th, is a “chink of light” and could allow international travel to resume this summer, according to industry figures.

MARCH

People have been eating as if their lives depend on it over the last 12 months, with foods that boost the immune system now found in Irish fridges and presses in larger quantities than ever before as we seek to give ourselves an edge over Covid, according to Bord Bia.

Dunnes Stores is accused of “blatantly flouting” Covid-19 guidelines by ramping up a click-and-collect service prohibited under Level 5 lockdown restrictions. Duncan Graham, chief executive of Retail Excellence, says he has been inundated with queries from members in recent days complaining about the retailer.

Electricity and gas provider Energia is to increase its prices from early next month in a move which will see the annual bills of many customers climb by more than €100. We are only getting started on that front. By the end of the year price hikes across the board have seen the cost of heating and lighting a typical Irish home rise by more than €600.

Cold and flu remedy sales slump as social distancing, working from home, masks, lockdowns and the shutting of virtually all social outlets means people are not getting the traditional aches, pains, coughs and sneezes associated with this time of year.

The 2021 .IE Tipping Point research from the company behind Ireland’s .ie country domain and Digital Business Ireland paints a gloomy picture for 2021, with just 45 per cent believing life will return close or completely to pre-Covid normality by the end this year, with the remainder telling researchers life will be more or less the same as it was in 2020, or even more restricted. We know now who was right.

An “ocean of alcohol” has been pouring into Irish homes since the start of the Covid-19 crisis, with official data showing wine sales for home consumption increasing dramatically last year, according to Alcohol Action Ireland (AAI).

Green fingers become the latest unusual side-effect of Covid-19, with interest in gardening blooming like never before since the start of the crisis a little over a year ago, with the sums spent on gardens by Irish consumers topping €1.2 billion, up more than 50 per cent on the 2018 figure and 14 per cent higher than the previous record level of spending, which was in 2008.

A mandatory quarantine system opens to people arriving from a list of 33 places, mainly in Africa and South America, which are on the Government’s Category 2 list of “high risk” countries.

More than one in 10 people say Covid-19 has reduced their capacity to pay their electricity and gas bills, while 20 per cent are concerned about the impact lockdowns and working from home have had on their usage, according to a report from the Commission for Regulation of Utilities (CRU).

The devastating impact of Covid-19 on Ireland’s hospitality sector has been mirrored across the world, with almost €4 trillion lost in 2020 as a direct result of the pandemic, according to research published by the World Travel & Tourism Council.

APRIL

KBC announces its intention quit the Republic after more than four decades of doing business here and says it is already in advanced talks to sell its performing loans and deposits to Bank of Ireland. It is also “reviewing options to divest” its non-performing loans and will most likely sell them to an overseas distressed debt fund.

Tributes are paid to Canadian entrepreneur Galen Weston, who died at home this week after a long illness at the age of 80. His extensive business interests included ownership of Brown Thomas and Arnotts, and a shareholding in Penneys.

Joe Walsh Tours, one of Ireland’s oldest travel agents and tour operators, ceases trading after 60 years, citing Ireland’s travel protocols due to Covid-19 as “the most restrictive in Europe”. It was established in 1961 and was the largest fully Irish-owned tour operator providing group travel to pilgrimage destinations.

A brazen new telephone scam surfaces in which criminals impersonate staff at the Office of the Attorney General in an attempt to mislead people into thinking they have been the victims of identity theft or other criminal acts. It catches on amongst the scammers and within weeks the entire nation is being called by various “authorities” warning that their arrest is imminent.

Pet owners are oblivious to the potential problems posed by post-pandemic puppies once pre-lockdown life resumes, according to the Dublin Society for the Prevention of Cruelty to Animals (DSPCA). It points to a surge in pet ownership during the Covid-19 crisis but warns of a wave of separation anxiety amongst animals who have grown accustomed to having their owners at home all day every day over the last year.

MAY

Retail in Ireland reopens. First there is shopping by appointment followed by a full reopening a week later. Retail Excellence described the reopening as fantastic news and expressed optimism that another lockdown would not be necessary as the vaccination rollout gathers pace.

Almost half of Ireland’s children have been comfort-eating through the Covid crisis, and increasingly stressed-out parents are struggling to wean them off the biscuit tin, according to Safefood.

Supply problems and soaring demand has caused a shortage of the crumbliest chocolate that traditionally elevates ice-cream cones to 99 status. Cone connoisseurs across the Irish ice-cream industry have said they have never seen shortages like this, and warned that supplies may be exhausted by the middle of June.

The HSE suffers a ransomware attack from shadowy criminals thought to be based in Russia. Almost the whole health system is crippled but no ransom is paid and the criminals give the authorities here the encryption key.

JUNE

After more than five months with their properties shrouded in silent gloom, Irish hoteliers are allowed to open their doors again.

Insurance Ireland breached EU antitrust rules by restricting competition in the car insurance market, the European Commission says in a preliminary finding following an anti-trust investigation into the organisation in May 2019 to assess whether it was operating a cartel. The commission’s findings indicate Insurance Ireland arbitrarily delayed or de facto denied access to other insurers and their agents to its Insurance Link system.

The National Public Health Emergency Team (Nphet) recommends indoor hospitality be restricted to the vaccinated. The proposal causes fury among Ministers, even though they accepted it, and an angry backlash from the hospitality industry and politicians. But then it is adopted and works pretty well.

JULY

Some good news, finally. The sun starts shining and stays shining for weeks. It’s amazing.

The Central Bank plans to ban the widespread practice of motor and home insurers increasing premiums for loyal customers by stealth. However, it stops short of following the UK in effectively prohibiting providers offering below-cost discounts to lure new customers.

A ban on touts reselling tickets for large popular gigs including concerts and sports events above face value becomes law four years after it was first considered.

VAT changes come into effect which means goods coming into the Republic from outside of the EU – including from the UK – are hit with charges, leading to many of the nightmares before Christmas that Irish consumers are currently experiencing.

The Republic starts implementing a system to allow those who have been vaccinated fully, or have recovered fully from Covid-19, travel to EU destinations without restrictions as long as they have been issued with a Digital Covid Certificate.

Half of Ireland’s tenants spend more than 30 per cent of their take-home pay on rent, while 12 per cent spend more than half their income on keeping a roof over their head, according to the Residential Tenancies Board (RTB).

AUGUST

Used car prices rose by 40 per cent in the last 12 months, says DoneDeal. The inflation rate does not mean the second-hand car you bought last year is now worth 40 per cent more than when you paid for it. It means a one-year-old Golf, for example, last year cost 40 per cent less than a one-year-old Golf this year.

Wealthier shoppers are being deterred from returning to Dublin city centre by Dublin City Council’s crackdown on cars, business group Dublin Can Be Heaven said. “If you want to get the better-heeled customer into the city, people who want to buy more than a coffee, they generally prefer to travel by car,” a spokeswoman said. Quite.

Drivers could benefit from lower motor insurance costs following an investigation by the Competition and Consumer Protection Commission (CCPC). Motor insurers AIG, Allianz, Axa, Aviva, FBD and broker AA Ireland pledge to reform compliance on foot of a CCPC inquiry into allegations that industry players were “signalling” price increases to each other.

Charity shops report an “unprecedented” spike in sales since reopening in May as new and younger customers seek more affordable and sustainable items.

Problems with faulty goods or questions about online shopping were among the most common reasons people contacted the CCPC in the first half of this year.

SEPTEMBER

Lidl Ireland promises to install “reverse vending machines” to allow customers exchange plastic bottles and aluminium cans for vouchers at all of its stores by 2023, making it the first Irish retailer to offer the option.

We are told we can now put all plastics in the mixed dry recyclables.

Irish inflation hits a 10-year high driven by a rise in the cost of transport, housing, restaurants and hotels. Central Statistics Office (CSO) data shows consumer prices rose 2.8 per cent in the 12 months to the end of August, the sharpest level of price growth seen since November 2011.

The European Commission is to seek to force manufacturers to adopt one standard charger for electronic devices. All smartphones, tablets, cameras, headphones, portable speakers and handheld videogame consoles would have to be built to accept a USB-C charger under the plans to be implemented by mid-2024, despite resistance from the tech industry.

The European Court of Auditors publishes a special report – titled Air passenger rights during the Covid-19 pandemic – which says “key passenger rights were not protected in this unprecedented crisis, in particular in the early stages of the pandemic”. The auditors said that reimbursements to air passengers for cancelled flights were put on hold, and passengers were treated differently across the EU. “At the same time, member states provided unprecedented amounts of state-aid support for airlines and package organisers.”

OCTOBER

Scam artists conned Irish people out of more than €15 million in the year to the end of July, with fraudulent activity jumping by almost 80 per cent as criminals sought to maximise their profits from the fear and uncertainty caused by Covid-19.

Smokers who drive long distances and live in large homes are likely to be the main losers after this year’s budget, although almost everyone else looks set to be spared any tax increases or additional charges.

An Irish woman was one of hundreds of people barred by Ryanair until she repaid a refund she had sought from Bank of Ireland for an earlier flight she had been unable to take because of Covid-19 travel restrictions. Bank of Ireland then admits it wrongly started the refund process in connection with a return flight to Portugal.

NOVEMBER

Irish inflation reaches a 14-year high as rising energy costs, supply shortages and increased consumer demand drive up prices. Over the past 12 months prices rise by 5.1 per cent, according to the CSO. The rise last month was the largest recorded since April 2007.

Dublin City Council grants event licences for five Garth Brooks concerts to go ahead in Croke Park next year.

James Cromwell, who teamed up with a pig called Babe to take the world of sheep trials by storm, writes to the Minister for Agriculture to condemn the practice of live pig exports and to plead with the Government to suspend plans to ship breeding sows to China.

Antigen tests are all the rage all of sudden after we are told – eventually – they can be used as a tool in the fight against Covid. One online pharmacy sees sales climb from a few hundred a week during the summer to more than 30,000 in a week. The Government promises to subsidise the cost, but then the wholesale cost falls and that plan is scrapped.

Fine Gael TD Bernard Durkan calls for an audit and investigation of the National Lottery as there has not been a winner of the top jackpot in six months. “It’s been almost six months since it was won. This didn’t happen in Ronan Collins’s day,” he said.

Omicron arrives and messes up all our plans. All arrivals into the State – whether vaccinated or not – now need a clear Covid test result from Friday onwards. And that’s just the start of it.

DECEMBER

Tesco Ireland buys Galway-based grocery retailer Joyce’s supermarkets. The acquisition will see 10 supermarkets that currently operate under the Joyce family’s independent brand rebranded and designed as Tesco stores throughout 2022.

The Dublin Flea Market says it is to close for good at the end of the year, with the organisers blaming “red tape and rocketing rents” as well as the pandemic for their decision.

The Gaiety confirms it is cancelling half the tickets already sold for its Christmas pantomime, saying it has been forced to “let down” customers because of the Government’s decision to limit capacity to 50 per cent.

Christmas will cost Irish households an average of close to €1,000 this year, although spending will climb significantly once children enter the frame, according to research from the CCPC. In news that will come as a surprise to absolutely no one, the research makes it clear that having children under 18 is a key factor in soaring Christmas spending.

The Lotto still isn’t won and executives at the National Lottery appear before the Oireachtas finance committee to explain what is going on. It’s just bad luck, they say and call for regulatory approval for changes that will ensure “an improbably long wait for a capped jackpot win cannot occur again”.

Irish households are facing a major cost-of-living squeeze with inflation now running at a 20-year high of 5.3 per cent on the back of soaring energy costs and supply chain disruption linked to Covid. Energy prices remain the chief driver, with electricity, gas and other fuels up 29 per cent on this time last year. The cost of home heating oil has skyrocketed by 71 per cent in just 12 months. Price comparison website Bonkers.ie said the price hikes could increase annual household energy bills by as much as €1,300.

And on that note, happy new year.