A grocery price war has started? That’s great news, right?

Steady on. It’s less of a grocery price war than a grocery price squabble. It kicked off last Sunday morning when the Musgrave Group, which owns SuperValu and Centra, announced that it was cutting the price of its entire range of own-brand butters by as much as 15 per cent.

Well 15 per cent is not too shabby is it?

No, it is a fairly hefty decrease for sure and it immediately saw the price of the retailer’s 454g butter fall from €3.99 to €3.39, while all its 227g butters were reduced from €2.39 to €2.09.

And why was it able to cut its butter prices by so much?

Well, according to a statement issued by Musgraves, it understands “the ongoing cost pressures facing households and remains focused on delivering value for customers”.

“We continue to invest heavily in our own-brand range to ensure shoppers can access great quality products at the best possible prices,” it said.

That doesn’t explain anything, does it?

No. But with input costs – including energy and the core ingredients of butter, namely cream – falling in recent months it seems likely that the retailer was able to pass on the savings to consumers.

Early on a Sunday morning just after Christmas seems like a weird time to announce a price cut?

It does until you realise that it is a game that Irish retailers are forever playing against each other. The aim of the game is to catch your rivals off guard when it comes to price moves in order to gain as many positive headlines as possible while putting pressure on others to act at a time that might not suit them.

We’ve seen this on several occasions in the recent past with Lidl price cuts on products including milk, for example, coming late on Friday evenings when its rivals have knocked off for the weekend. It forces them into hasty weekend price cuts of their own.

And all the supermarkets move in lockstep when it comes to prices?

Not all prices – but price matching of core products has long been a feature of the Irish supermarket landscape. Once one company cuts the price of a staple, the others tend to follow suit. And so it was on this occasion. Within hours of the SuperValu and Centra announcement, Aldi said the price of its 454g own-brand butter was going from €3.99 to €3.39, while the 227g option was reduced to €2.09 from €2.39. Then Lidl mirrored that move and by Tuesday morning – less than 48 hours after the Musgraves announcement – Tesco had matched the price cut.

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What impact will the price move have on our pockets?

For most people, it will have a pretty minimal impact, it should be said. While a 60 cent drop in the price of a core product such as butter is obviously to be welcomed, it will not save even heavy butter users a whole lot of money.

Someone who buys 454g each week between now and next Christmas will save themselves a total of €31.20, assuming prices stay where they are in the meantime.

But this cut has to be added to a cut in the price of milk and bread too, right?

Indeed.

In October, Lidl announced it was shaving 10 cent of the price of its own-brand two litre containers of milk, after which all the other retailers did likewise. It said it was part of a wider series of price reductions that would cost it a total of €20 million. A month later it cut the price of some of its sliced pans by 10 cent, a move which was also replicated by its rivals.

We are saving on three key products?

Yes, but the savings are still minimal. A household that goes through eight litres of milk, two sliced pans and one 454g packet of butter each week can look forward to having an additional €62.40 to spend over the course of next year as a result of recent price cuts.

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Hmm. That’s not a whole lot.

Not really. Without wanting to be overly gloomy about it, it is also worth looking at the announcements in context. While cutting the price of 454g of butter from €3.99 to €3.39 is better than a price hike, we should point out that in the run-up to Christmas 2021, the price of 454g of own-brand butter across Ireland’s main supermarkets was €2.19 which is €1.20 less than it is now.

And then there is the reality – highlighted earlier this month by retail analysts Worldpanel – that grocery price inflation is currently running at a rate of 6 per cent which more than wipes out any savings Irish consumers can look forward to as a result of cheaper bread, butter and milk.