CSO Data Shows Relentless Rise in Retail Mark Ups

Data recently published by the CSO shows that consumers are paying €1000 more as a result of higher mark ups over the last five years. These figures show that between 1999 and 2003

• Gross Mark Up has increased in all areas of the retail trade. The greatest increase has been in supermarkets followed by chemists.



• If the percentage mark up that prevailed in 1999 still prevailed five years later,the consumer in these key retail sectors would have had to spend €1500 million less. It would have trimmed 4% off the shopper’s bill



• The increase in margins has cost the typical household €1100. This is made up of an extra €625 in the supermarket, €180 in the motor garage, €175 in clothing and footwear and hardware area and €65 in the chemist.

Not all of the extra mark up has gone into profits. It is clear that rising costs both through higher personnel costs and more expensive shopping conditions account for some of the change. However, significantly, the rate of profitability is up considerably in supermarkets and in chemists. The analysis does not show the contribution of government generated costs to rising margins. Stealth taxes were a big factor in 2002/2003.

By contrast,the figures show that there has been something of a squeeze on margins occurring in the Hospitability sector but from historically very high levels. Between 1999 and 2003.

• Mark ups have fallen in the hotel sector quite significantly and are also drifting downwards in the restaurant sector



• Only the bar trade continued to show increased in mark up but the expectation is that they too have come under pressure since 2003



• Overall consumers have saved €154m in lower mark-up in the Hospitality sector, saving the typical consumer €110 in the year

In recent years, these sectors have been a major factor driving price inflation and this is the first official indication that some competition is entering these sectors.

It is time that the CSO conducted a more detailed analysis of trends in various consumer sectors so we ca have a better picture why Ireland has become one of the most expensive places to live.

The CSO data notably excludes VAT. Ireland has the highest rates of VAT in the EU. Both the standard rate and the high rate of VAT were increased by government in this period, so the pressure on consumers was directly amplified by government.

See attached table.

	1999	2003	Change	€millions
Supermarkets	32.9	44.8	+11.7	877
Food, Beer, Specialised Shops	36.7	40.5	+3.8	35
Chemists/ Cosmetics	45.8	53.9	+8.1	91
Clothing Footwear, Hardware, Books, Papers	48.4	52.9	+4.5	246
Motor Trade	15.1	17.1	+2.1	251
				€1,500m

Note: Gross Mark Up % is Gross Margin as a percentage of the Purchase Price of Goods for Resale

Mark Up (%) in Hospitality Sector

	1999	2003	Change	?millions
Hotels	93.1	78.8	-14.3	-150
Bars	41.1	42.6	1.5	37
Restaurants	66.3	62.8	-3.5	-41
				-154

Note: Gross Mark Up is Gross Value Added as a percentage of the total purchases of goods and services for the business.

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