Subscribe
Uncategorized - August 23, 2025
The rising cost of food has become a pressing concern for Irish consumers, placing significant strain on household budgets. Indeed, as grocery prices continue to climb, families across Ireland are now left grappling with the challenge of affording basic necessities, a situation exacerbated by global economic pressures and domestic policy shortcomings.
The issue, discussed extensively in a recent Dáil Éireann debate on July 9, 2025, underscores the urgent need for systemic solutions to alleviate the burden on Irish households and support the nation’s vital agricultural sector.
Ireland’s Central Statistics Office (CSO) reports that grocery prices have surged by nearly 40% over the past four years, far outpacing the 21% rise in the Consumer Price Index during the same period.
This disparity translates to an additional €3,000 per year for the average family’s grocery bill compared to 2021, a figure that weighs heavily on low- and middle-income households.
The Credit Union Consumer Sentiment survey also highlights the precarious financial state of many, with 15% of Irish consumers unable to manage a €1,000 financial emergency.
For these families, the weekly shop has become a daunting exercise in prioritising essentials.
The McKinsey and EuroCommerce report, The State of Grocery Retail 2025: Europe, helpfully provides a broader context, noting that while grocery sales across Europe grew by 2.4% in 2024, this was driven by 2.3% food price inflation and a modest 0.2% volume increase.
In Ireland, however, the impact of inflation has been particularly acute, with specific staples seeing dramatic price hikes. In the Dáil, Sinn Féin leader Mary Lou McDonald pointed to a 54% increase in the cost of sugar, a 48% rise in lamb, and a 55% surge in the price of a fillet of cod, illustrating the relentless upward pressure on food costs.
These figures align with CSO data showing butter prices up by €1.10 per pound, cheddar cheese by 95 cents per kilo, and milk by 27 cents per litre over the past year.
Global supply chain disruptions, including the ongoing effects of the war in Ukraine and post-Covid recovery challenges, continue to significantly contribute to these price increases.
The McKinsey report also highlights volatile supply chains and high cost pressures as key drivers, with Irish farmers facing a near 20% rise in production costs over the past year.
A point that has been repeatedly highlighted in the Dail over recent months is the dire state of Irish agriculture, with many deputies noting that 68% of farms earned less than €30,000 in 2023, with the average farm income at just €20,000. This financial strain on producers inevitably passes through to consumers, as farmers struggle to absorb rising energy, labour, and environmental compliance costs.
Retailers, too, are under scrutiny, with accusations of price gouging fuelling public discontent. Social Democrats TD Cian O’Callaghan argued in the Dáil that the lack of transparency in supermarket profit margins breeds mistrust, as major retailers like Aldi, Lidl, and Dunnes Stores do not publish profit figures in Ireland.
The McKinsey report notes that while discounters, such as Aldi and Lidl, gained a 0.2 percentage point increase in market share in 2024, reaching 23.2% across Europe, private own brand labels saw a 0.3 percentage point rise in volume share. In Ireland, this shift towards discounters and private labels reflects consumer efforts to save money, yet the report also indicates that 25% of European consumers traded up to premium products in 2024, a trend driven by higher-income shoppers.
In contrast, Irish families, particularly those on fixed incomes, are more likely to trade down, opting for cheaper alternatives to cope with rising costs.
The competitive grocery market, as outlined in the McKinsey report, places additional pressure on retailers’ profitability, with low volume growth of 0.2% expected annually through 2030 across Europe.
In Ireland, this translates to a challenging environment where passing on cost increases to consumers is difficult without risking market share.
The report identifies four key practices among successful grocers including high private label share, pleasant in-store experiences, excellent product quality, and low prices while also noting, perhaps counter intuitively that measures such as loyalty programs or sustainable offerings do not significantly drive growth.
For Irish consumers, this focus on low prices is critical, yet the reality is a 22% increase in the cost of a typical shopping basket over three years, according to an Irish Independent survey, with meat prices alone rising by up to 22% in the past year.
It is widely accepted in Irish political discourse that aspects of the broader economic context exacerbate these challenges. Energy costs, up by more than a third over four years, and the ongoing housing crisis have further eroded disposable income.
The McKinsey report projects that Western Europe, including Ireland, will see only 0.1% annual volume growth through 2030, underscoring the need for operational excellence and differentiation among retailers.
Meanwhile, the number of children in consistent poverty in Ireland nearly doubled to over 100,000 in 2024, a stark reminder of the human toll of rising costs.
In Ireland, 57% of consumers also express concern about ultra-processed foods and pesticide use, with 47% planning to buy more fresh produce. However, affordability remains a barrier, as 58% would opt for cheaper imported food over local produce, threatening the sustainability of Ireland’s agricultural sector, which employs 173,000 people and accounts for 10% of exports.
The report also highlights a 3% decrease in consumer intent to buy environmentally friendly products, reflecting a prioritisation of cost over sustainability.
Irish Government responses have been met with criticism. Taoiseach Micheál Martin has defended Ireland’s cost-of-living interventions as among Europe’s most significant, yet critics can convincingly argue that they fail to address structural issues.
Proposals to enhance the Competition and Consumer Protection Commission’s (CCPC) powers and grant the Agri-Food Regulator authority to demand price transparency are under consideration, but many view these as insufficient.
The CCPC’s 2023 analysis found no evidence of market failure, a claim Retail Ireland supports, arguing that low margins reflect supply chain pressures rather than profiteering. However, the lack of retailer accountability remains a point of contention.
Looking ahead, the McKinsey report suggests that grocers must focus on operational efficiency and differentiation to thrive, with IT modernization and supply chain resilience rising as priorities for European CEOs.
In Ireland, supporting local farmers through targeted subsidies and addressing housing costs could ease consumer pressures, as UCC economist Oliver Browne has suggested.
The Irish Creamery Milk Suppliers Association has warned that the era of “cheap food” is over, a sentiment echoed by Agriculture Minister Martin Heydon, who cites persistent input cost increases.
With potential US tariffs and global uncertainties looming, the path to price stability therefore remains uncertain.
Irish families now face a complex crisis, where rising food costs intersect with economic and social challenges. Greater retailer transparency, robust support for agriculture, and innovative policy interventions are essential to alleviate their burden.
For now, the shopping and grocery bill remains a painful reminder of the fragility of Irish household budgets, demanding urgent action to ensure affordability and sustainability for all.
The challenges in the food sector also raise questions about Ireland’s broader economic model. Heavy reliance on global imports for staples, combined with environmental regulations that increase domestic production costs, has created a situation where Irish consumers are exposed to both international volatility and domestic rigidity. Economists argue that while the EU’s Green Deal and Farm-to-Fork strategies aim at long-term sustainability, they impose short-term burdens that make basic goods less affordable. For many households, these measures feel detached from immediate realities.
Another emerging issue is the rural-urban divide in access and affordability. In rural communities, where households are often closer to production, food prices can paradoxically be higher due to transport and distribution mark-ups. Meanwhile, urban consumers face greater competition for limited supply and higher retail overheads, which are also passed on. This uneven impact risks deepening social and regional inequalities, particularly in counties already experiencing demographic decline.
The political implications are significant. Rising food costs feed into broader dissatisfaction with government management of inflation, housing, and wages. Public frustration is evident in polling, where cost-of-living pressures consistently rank as the electorate’s top concern. Without decisive structural reform, the crisis risks hardening into a long-term political fault line.