What's the deal with grocery prices? writes Conor Pope

A grocery price survey carried out on behalf of the National Consumer Agency (NCA) at the end of July made depressing reading and seemed to show that Irish shoppers have little choice but to pay high prices for most household essentials.

But maybe they don't have to. Consumer lobby groups have suggested that the picture is incomplete as the survey ignored the elephants in the room - Lidl and Aldi - which are constantly trumpeting their lower prices.

While the news that convenience stores cost significantly more than supermarkets for many branded products was hardly surprising, the finding that the price difference across the three major supermarket chains operating in the Republic was just 1.6 per cent raised more than a few eyebrows.

Of 45 branded items surveyed, 21 cost exactly the same in Dunnes Stores, Tesco and Superquinn. Dunnes was the cheapest, but not by much, and the difference between it Tesco and Superquinn for a basket of 45 items was just €2.20.

Ann Fitzgerald, acting chief executive of the NCA described the price similarities as worrying and said the major multiples were "either all watching each other and following each other's prices, or there is the potential for a lack of competition."

Suggesting the groceries market was too concentrated on the three main players, she said she looked forward to a review of the sector by the Competition Authority, due out this year, and expressed the view that consumers might benefit if a major outside player such as Asda entered the market.

But surely Aldi and Lidl are major outside players who are operating very much inside the grocery sector? In the wake of the study, website ValueIreland set out to find out just how much cheaper the two German stores actually were. Site editor Diarmuid McShanewent to both stores and filled baskets with items which, he says, were broadly similar to the branded products the NCA surveyed.

'SUPPOSEDLY, THE NCA was only shopping for branded items but that in itself is falling into the hands of large multiples," he says. "Misguided people seem to be willing to pay a premium for better-known branded items when in a lot of cases, the lesser-known brands, such as those stocked by Aldi and Lidl are just as good - and cheaper as well." He took the shopping list from the NCA website and went to Lidl on July 30th, and to Aldi on July 31st. He says he was unable to locate just three items or their equivalents - Müller Crunch Corner, Flora Sunflower Oil, and Cow & Gate Baby Milk Comfort Stage 1 from Birth. "All the rest were almost exact matches, albeit with less well-known brand names.

He says he was "amazed by the results" While the NCA basket (not including the three items he was unable to find in the German discount stores) cost €119 in Dunnes, €120.97 in Superquinn and €121 in Tesco respectively, the cost of his basket in Aldi was just €88.98, while the Lidl shop was marginally cheaper at €88.68.

"So, for a similar weekly shop in a Lidl or Aldi store, Irish consumers could save about €30 over the three traditional multiples - that's a saving of nearly 25 per cent. If, as a shopper, assuming you're not absolutely tied to brands, that's a fantastic saving," McShane says.

It should be pointed out that ValueIreland could equally have bought many of the main retailers' own-brand products and made equally significant savings. A 500g box of Tesco cornflakes is 80 cent, or more than 30 per cent, cheaper than a box of similarly sized Kellogg's cornflakes, while one kg of Euroshopper spaghetti in Superquinn costs €1.24 less than Roma spaghetti.

"Irish consumers could save themselves over €1,800 a year by shopping at Aldi or Lidl. But why didn't Ms Fitzgerald and the National Consumer Agency tell us that?" he asks. The short answer to his question is that she will, in time. We contacted the NCA, which confirmed that the reason that Aldi and Lidl had been left out of this survey was because they stock so few branded products.

A spokeswoman said that last month's survey was part of a pilot scheme and a new, much wider study, which will include Aldi, Lidl and Marks & Spencer will be carried out in December with the results published in the new year.

BUT WHILE THE numbers from McShane certainly look impressive, is shopping in Aldi or Lidl truly comparable? Did he find "exact matches" as he claims, and are the savings worth it?

We spoke to one mother of six children who says that while the ValueIreland figures are accurate and she could easily save €100 a week by doing her entire family shop in her local Lidl or Aldi, it is a joyless experience and many of the savings prove to be false economies.

"Both Lidl and Aldi are okay if you are very selective," she says. "They are good for fruit and some vegetables and for things such as washing powder and plastic bags and tinfoil but with many of the brands there is no pleasure in it." Both Lidl and Aldi are, she says, devoid of atmosphere and the quality of some of the own-brand products they offer is questionable. "I don't know how many packets of cornflakes from both Lidl or Aldi I have thrown out," she says. "It's not that my children are fussy, it's just that the cereals are horrible.

"If you buy food that is not eaten or only half-eaten and then thrown out, what savings are you really making?" she asks. "Life is short enough without having to shovel stuff you don't like into you for the sake of a few quid."

© 2007 The Irish Times