Food prices continue to race ahead, as finance minister says he expects supermarkets to pass on cost cuts

Higher prices for meat, sugar, frozen fish, milk and eggs saw the prices of food and non-alcoholic goods rise by 12.7pc in the year.

This is a slight easing of the rate of food inflation in April when the cost of food rose 13.1pc in the year, according to the latest consumer price index from the Central Statistics Office (CSO).

Prices of stables rose in May despite ahead of the main supermarket multiples cutting the prices of own-brand milk, bread and butter.

There were price increases for an 800g loaf of white sliced pan, with it up by 18c in a year.

An 800g loaf of brown sliced pan was up by 17c in the year, with 2 litres of full fat milk 35c more expensive.

A pound of butter was up 40c when compared with May last year, the CSO said.

Overall prices of goods and services rose by 6.6pc in May when compared with a year earlier.

This is down from an annual increase of 7.2pc in the 12 months to April.

This is the 20th straight month where the annual increase in the consumer price index has been at least 5pc.

CSO statistician Anthony Dawson said: “The annual change in food and non-alcoholic beverages costs reflects a rise in prices across a range of products such as sugar (+42.5pc), frozen fish (+28.1pc), fresh whole milk (+18.9pc), and eggs (+18.8pc) compared with May 2022.”

He said education and Transport were the only divisions to show a decrease when compared with May 2022.

In the month of May consumer prices rose by 0.3pc.

This is down from last year when the same month saw a rise of 0.9pc.

The most significant monthly price changes were increases in restaurants and hotels and alcoholic beverages and tobacco.

Restaurants and hotel prices rose due to higher prices for hotel accommodation and higher costs of alcoholic drinks and food consumed in licensed premises, restaurants and cafes.

It comes Tesco said it was cutting prices on hundreds of products, with other retailers saying they are now reviewing their prices.

Tesco is reducing prices by an average of 10pc across more than 700 products.

One major retailer is reducing prices by an average of 10pc across more than 700 products

Its price-cutting is sure to force a response from rivals Dunnes Stores, SuperValu, Lidl and Aldi.

The price reductions represent a step up on the recent cuts to the price of own-brand bread, butter and milk announced by the main supermarket chains.

Finance Minister Michael McGrath said he expects other retailers to pass on input cost cuts in response to Tesco.

“These reductions are very good news for consumers, and I think it will be warmly welcomed,” he said on RTÉ Radio 1’s ‘Morning Ireland’.

“Everybody has seen the really significant spike in prices over the last 18 months or 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. 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 pattern accordingly.”

He said that when input costs fall, the Government expects retailers to pass on the benefit to consumers.

He added: “So, this is potentially quite a significant turning point given the number of products that are now 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.”